2015
ANNUAL REPORT
Intermap Technologies Corporation
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
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
TRANSFER AGENT
Computershare Trust
Company of Canada
600, 530 - 8th Avenue S.W.
Calgary, Alberta T2P 3S8
Canada
AUDITORS
KPMG LLP
150 Elgin Street
Suite 1800
Ottawa, ON K2P 2P8
Canada
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
Dr. John C. Curlander
Director
Colorado, USA
Michael A. Hoehn
Director
Ontario, 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
President’s Message
Financial information as discussed herein is in U.S. dollars unless otherwise noted.
1
The year 2015 was a success for Intermap. In June, we were awarded a $175 million Spatial Data
Infrastructure (SDI) project with the final contract signing taking place in February of 2016. Under the terms
of this contract, product and service deliveries are scheduled to commence by mid-year 2016, subsequent
to the completion of the project financing by the contracting party. Large SDI’s such as this will leverage the
substantial intellectual property of Intermap and will position us as a clear leader in the SDI market.
The most important component of the SDI award is our Orion Platform® software that creates the geospatial
infrastructure for the country. This infrastructure enables all of the country’s geospatial data and metadata
to be easily managed and manipulated to derive actionable results across the entire government.
Additionally, our professional services capabilities will play a key role in maintaining the system once it has
been implemented. Our professional services will also be used to bridge the gap between the country’s
information needs and the capabilities of the Orion Platform. The end result is an easy to use geospatial
system that delivers answers for all users, not just geospatial experts. The aggregation of our products and
services into an all-encompassing solution for a nation is what an Orion based SDI project is all about.
This SDI project will also utilize our proprietary airborne-based Interferometric Synthetic Aperture Radar
(IFSAR) sensor technology to create a new three-dimensional digital elevation model (DEM) of the entire
country. Once this highly accurate DEM is complete, our patent pending fusion technology will then be
used to combine areas of Light Detection and Ranging (LiDAR) data into the IFSAR DEM for specified cities,
utility corridors, and other key areas within the country that require greater accuracy. This IFSAR data will
also be used to orthorectify satellite imagery over the entire country to correct for the inherent spatial
inaccuracies of two-dimensional satellite imagery. This corrected imagery will then be included in the
nationwide geospatial database. The end result will be a superior geospatial database for the entire country
that can only be achieved by merging multiple sensor technologies into one seamless database.
In addition to our SDI success, we also had continued success during the year with our software-as-
a-service (SaaS) based risk analysis software application called InsitePro™. InsitePro is now starting to
make a real mark within the insurance industry, especially with insurance underwriters, as it can easily be
customized for customer specific scoring. This scoring utilizes Intermap’s standard flood model analysis and
combines it with customer specific information, like distance to water, distance to perils, or claims data.
This customization feature differentiates us from the competition and is powered by our Orion Platform
capabilities.
In summary, the majority of Intermap’s efforts during the year were focused on further development of our
Orion Platform to be used in SDI’s. The platform was further enhanced to handle more types of data, and
new analytics were added to address the specific requirements of the recently announced SDI contract.
The Orion Platform operates as a platform-as-a-service (PaaS), and the service it provides is an analysis of
geospatial information for non-geospatial experts, allowing the untrained user to access unique actionable
results. As an example, with our InsitePro application, non-geospatial users can use the results to determine
if any given property or groups of properties are in a flood zone, and then take the appropriate action on
pricing or deciding to quote or not quote any specific location.
And lastly, we continue to work on additional SDI opportunities around the world, however, due to the
complexity and unique political aspects of each of these projects, it is difficult to predict the exact timing for
the ultimate closing of any new SDI project. Beyond SDI’s, we are also working to expand our base business
in the coming months, which includes software, professional services, mapping services and archive data
sales. We believe the success in any one of these components can be a catalyst for improved future sales in
the other components of our business.
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 2016.
(Signed) Todd A. Oseth
Todd A. Oseth, President and Chief Executive Officer
Intermap Technologies
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Management’s Discussion and Analysis
3
For the year ended December 31, 2015
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 29, 2016, and should be
read together with the Company’s audited Consolidated Financial Statements and the accompanying
notes for the years ended December 31, 2015 and 2014. 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, revenue fluctuations, nature of
government contracts, economic conditions, loss of key customers, retention and availability of executive
talent, competing technologies, common share price volatility, loss of proprietary information, software
functionality, internet and system infrastructure functionality, information technology security, breakdown
of strategic alliances, and international and political considerations, including but not limited to those risks
4
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 geospatial 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, land
management, 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 geospatial
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.
Unlike other geospatial companies, Intermap often 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
2015 Annual Report | Management’s Discussion and Analysis 5
available for 17 countries in Western Europe, the contiguous United States, Hawaii, portions of Alaska, and
significant areas in Southeast Asia. Intermap also has 30-meter and 10-meter products of the entire world,
called NEXTMap World 30™ and 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
Revenue:
Mapping services
Professional services
Data licenses
3DBI software applications
Total revenue
Operating loss
2015
2014
2013
$
3.8
0.4
3.1
1.3
$
2.9
0.9
3.3
1.2
$
18.0
1.0
3.9
1.5
$
8.6
$
8.3
$
24.4
$
(9.2)
$
(13.7)
$
(14.0)
Change in fair value of derivative instruments
$
(2.6)
$
2.0
$
1.8
Financing costs
$
(6.7)
$
(2.0)
$
(1.0)
Net loss before data library impairment
$
(18.1)
$
(12.8)
$
(4.3)
Data library impairment
Net loss
EPS basic and diluted
Adjusted EBITDA
Assets:
$
-
$
-
$
(9.2)
$
(18.1)
$
(12.8)
$
(13.5)
$
(0.19)
$
(0.14)
$
(0.16)
$
(7.6)
$
(12.0)
$
1.2
Cash, restricted cash, amounts receivable, and unbilled revenue
$
3.1
$
2.1
$
9.0
Total assets
$
5.3
$
5.3
$
12.9
Liabilities:
Long-term liabilities (including finance lease obligations)
Total liabilities
$
$
7.8
27.7
$
$
0.5
11.8
$
$
0.4
7.2
Revenue
Revenue
Consolidated revenue for the year ended December 31, 2015 totaled $8.6 million, compared to $8.3
Consolidated revenue for the year ended December 31, 2015 totaled $8.6 million, compared to $8.3 million
million for the same period in 2014, representing a 5% increase. As of December 31, 2015, there
for the same period in 2014, representing a 5% increase. As of December 31, 2015, there remained $1.2
million in revenue from existing contracts ($0.8 million in professional services and $0.4 million in 3DBI
remained $1.2 million in revenue from existing contracts ($0.8 million in professional services and
software applications contracts) to be recognized in future periods.
$0.4 million in 3DBI software applications contracts) to be recognized in future periods.
Mapping services revenue for the year ended December 31, 2015 totaled $3.8 million, compared to $2.9
Mapping services revenue for the year ended December 31, 2015 totaled $3.8 million, compared to
million for the same period in 2014. Revenue was recognized on three contracts in North America for both
$2.9 million for the same period in 2014. Revenue was recognized on three contracts in North
periods, but the increase for the year ended December 31, 2015 was due to the size and timing of the
America for both periods, but the increase for the year ended December 31, 2015 was due to the
contracts.
size and timing of the contracts.
Professional services revenue for the year ended December 31, 2015 was $0.4 million in 2015, a decrease
Professional services revenue for the year ended December 31, 2015 was $0.4 million in 2015, a
from $0.9 million for the same period in 2014. The majority of the decrease was the result of a project
decrease from $0.9 million for the same period in 2014. The majority of the decrease was the result
management contract for a utility corridor in North America during 2014, with no similar contract in place
of a project management contract for a utility corridor in North America during 2014, with no
during the current year.
similar contract in place during the current year.
Data licensing revenue for the years ended December 31, 2015 and 2014 totaled $3.1 million and $3.3
Data licensing revenue for the years ended December 31, 2015 and 2014 totaled $3.1 million and
million, respectively. The slight decrease was primarily the result of decreased sales from the Company’s
NEXTMap Europe and Asia datasets, offset by increased sales from the Company’s NEXTMap USA dataset.
$3.3 million, respectively. The slight decrease was primarily the result of decreased sales from the
5
2015 Annual Report | Management’s Discussion and Analysis
6
Company’s NEXTMap Europe and Asia datasets, offset by increased sales from the Company’s
NEXTMap USA dataset.
3DBI software applications revenue was $1.3 million for the year ended December 31, 2015, a slight
increase from $1.2 million for the same period in 2014. The increase was primarily due to new
3DBI software applications revenue was $1.3 million for the year ended December 31, 2015, a slight
increase from $1.2 million for the same period in 2014. The increase was primarily due to new 3DBI software
3DBI software application contracts in 2015 for the Company’s risk management software
application contracts in 2015 for the Company’s risk management software application.
application.
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 Profit and
Other Comprehensive Income is as follows:
Loss and Other Comprehensive Income is as follows:
U.S. $ millions
2015
2014
Personnel
Purchased services & materials
Travel
Facilities and other expenses
$
$
11.0
3.6
0.5
1.8
16.9
12.1
5.5
1.0
2.1
20.7
$
$
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, 2015 and 2014, totaled $11.0 million and $12.1
Personnel expense for the years ended December 31, 2015 and 2014, totaled $11.0 million and
million, respectively. The 9% year-over-year decrease in personnel expense is primarily due to decreases
$12.1 million, respectively. The 9% year-over-year decrease in personnel expense is primarily due
associated with fewer personnel in all of the Company’s locations.
to decreases associated with fewer personnel in all of the Company’s locations.
Consolidated active employee headcount was 158 (including 61 in Jakarta, Indonesia) at December 31,
Consolidated active employee headcount was 158 (including 61 in Jakarta, Indonesia) at December
2015, a 12% decrease from 180 (including 73 in Jakarta, Indonesia) at December 31, 2014. The decrease
31, 2015, a 12% decrease from 180 (including 73 in Jakarta, Indonesia) at December 31, 2014. The
in personnel on a year-over-year basis was the result of reductions in (i) sales and marketing 27%, or 6
decrease in personnel on a year-over-year basis was the result of reductions in (i) sales and
personnel; (ii) software development 13%, or 3 personnel; (iii) operations 10%, or 11 personnel; and (iv)
marketing 27%, or 6 personnel; (ii) software development 13% or 3 personnel; (iii) operations 10%,
general and administrative 11%, or 2 personnel.
or 11 personnel; and (iv) general and administrative 11%, or 2 personnel.
Non-cash compensation expense is included in operating costs and relates to the Company’s long-term
Non-cash compensation expense is included in operating costs and relates to the Company’s long-
incentive plan, share options, and shares granted to employees and non-employees. Non-cash share-based
term incentive plan, share options, and shares granted to employees and non-employees. Non-cash
compensation for the years ended December 31, 2015 and 2014, totaled $0.6 million and $0.5 million,
respectively.
share-based compensation for the years ended December 31, 2015 and 2014, totaled $0.6 million
and $0.5 million, respectively.
Purchased Services and Materials
Purchased Services and Materials
Purchased services and materials (PS&M) includes (i) aircraft and radar related costs, including jet fuel; (ii)
Purchased services and materials (PS&M) includes (i) aircraft and radar related costs, including jet
professional and consulting costs; (iii) third-party support services related to the collection, processing and
fuel; (ii) professional and consulting costs; (iii) third-party support services related to the collection,
editing of the Company’s airborne radar data collection activities; (iv) third-party data collection activities
processing and editing of the Company’s airborne radar data collection activities; (iv) third-party
(i.e. LiDAR, satellite imagery, air photo, etc.); and (v) third-party software expenses (including maintenance
and support).
data collection activities (i.e. LiDAR, satellite imagery, air photo, etc.); and (v) third-party software
expenses (including maintenance and support).
For the years ended December 31, 2015 and 2014, PS&M expense was $3.6 million and $5.5 million,
respectively. The decrease was primarily due to (i) decreases in job and subcontractor expenses, offset by an
increase in software maintenance expenses due to increased 3DBI software development, and (ii) a royalty
accrual reversal of $0.8 million during the fourth quarter of 2015.
6
Travel
For the years ended December 31, 2015 and 2014, travel expense was $0.5 million and $1.0 million,
respectively. The decrease is primarily due to a decrease in sales and marketing travel during 2015.
2015 Annual Report | Management’s Discussion and Analysis
For the years ended December 31, 2015 and 2014, PS&M expense was $3.6 million and $5.5
million, respectively. The decrease was primarily due to (i) decreases in job and subcontractor
expenses, offset by an increase in software maintenance expenses due to increased 3DBI software
development, and (ii) a royalty accrual reversal of $0.8 million during the fourth quarter of 2015.
Travel
For the years ended December 31, 2015 and 2014, travel expense was $0.5 million and $1.0 million,
respectively. The decrease is primarily due to a decrease in sales and marketing travel during 2015.
7
Facilities and Other Expenses
For the years ended December 31, 2015 and 2014, facilities and other expenses were $1.8 and $2.1
Facilities and Other Expenses
million, respectively. The decrease is primarily due to a decrease in sales and marketing training
activities and general office overhead expenses during 2015.
For the years ended December 31, 2015 and 2014, facilities and other expenses were $1.8 and $2.1 million,
respectively. The decrease is primarily due to a decrease in sales and marketing training activities and
Adjusted EBITDA
general office overhead expenses during 2015.
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
Adjusted EBITDA
excludes interest (financing costs), taxes, depreciation and amortization. Adjusted EBITDA also
Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) is not a
excludes share-based compensation, change in value of derivative instruments, gain or loss on the
recognized performance measure under IFRS. The term EBITDA consists of net income (loss) and excludes
disposal of equipment, impairment losses or reversals, and gain or loss on foreign currency
interest (financing costs), taxes, depreciation and amortization. Adjusted EBITDA also excludes share-
translation. Adjusted EBITDA is included as a supplemental disclosure because Management
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
believes that such measurement provides a better assessment of the Company’s operations on a
as a supplemental disclosure because Management believes that such measurement provides a better
continuing basis by eliminating certain non-cash charges and charges or gains that are
assessment of the Company’s operations on a continuing basis by eliminating certain non-cash charges
nonrecurring. The most directly comparable measure to adjusted EBITDA calculated in accordance
and charges or gains that are nonrecurring. The most directly comparable measure to adjusted EBITDA
with IFRS is net income (loss). The following is a reconciliation of the Company’s net loss to
calculated in accordance with IFRS is net income (loss). The following is a reconciliation of the Company’s
adjusted EBITDA.
net loss to adjusted EBITDA.
U.S. $ millions
Net loss
Financing costs
Depreciation of property and equipment
Amortization of intangible assets
Income tax recovery
EBITDA
Change in value of derivative instruments
Share-based compensation
Gain on disposal of equipment
Gain on foreign currency translation
Adjusted EBITDA
2015
2014
$
(18.1)
6.7
1.0
-
(0.1)
$
(12.8)
2.0
1.1
0.1
(0.4)
$
(10.5)
$
(10.0)
2.6
0.6
(0.1)
(0.2)
(2.0)
0.5
(0.5)
-
$
(7.6)
$
(12.0)
Adjusted EBITDA for the year ended December 31, 2015 was negative $7.6 million, compared to
Adjusted EBITDA for the year ended December 31, 2015 was negative $7.6 million, compared to negative
$12.0 million for the same period in 2014. The difference in the adjusted EBITDA loss is primarily attributable
negative $12.0 million for the same period in 2014. The difference in the adjusted EBITDA loss is
to a decrease in operating costs of $4.0 million.
primarily attributable to a decrease in operating costs of $4.0 million.
Financing Costs
Financing costs for the year ended December 31, 2015 totaled $6.7 million, compared to $2.0 million for the
same period in 2014. The increase in year-over-year financing costs is attributable to interest incurred, and
accretion on, outstanding convertible and other notes payable issued during the last quarter of 2014 and
during 2015.
7
Depreciation of Property and Equipment
Depreciation expense for the year ended December 31, 2015 and 2014 was $1.0 million and $1.1 million,
respectively. 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.
Income Tax
Current income tax expense of $27 thousand was incurred during the year ended December 31, 2015,
compared to an expense of $Nil during the same period in 2014. The expense for the year ended December
31, 2015 relates to taxable income generated from the Company’s Czech Republic subsidiary.
2015 Annual Report | Management’s Discussion and Analysis
8
During the year ended December 31, 2015, a deferred income tax recovery of $73 thousand, compared to a
deferred income tax recovery of $383 thousand for the same period in 2014 was recorded. These recoveries
were due to the deferred tax effect of the accounting for the convertible and other notes payable closed
during the respective periods.
Derivative Instruments
The Company has issued non-broker warrants that are considered to be derivative liabilities as the warrants
are 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 years ended December 31, 2015 and 2014, the change in the fair
value of derivative instruments was a loss of $2.6 million and a gain of $2.0 million, respectively.
Gain on Disposal of Equipment
During 2015, the Company sold fully depreciated assets and recognized a gain of $94 thousand on the sale
of the assets. The assets sold consisted of spare radar parts, a transmitter, and miscellaneous IT 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 with a net book value of $64 thousand and recognized a gain
of $76 thousand on the disposal of the remaining deferred leasehold improvement; and (iii) recognized
a gain of $316 thousand on proceeds from an insurance claim for water damaged computer and storage
related equipment.
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, 2015, a foreign currency translation gain of $136 thousand was
recorded, compared to a gain of $7 thousand for the same period in 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
method of accounting based on the ratio of costs incurred to date over the estimated total costs to
complete the contract. While an effort is made to schedule payments on contracts in accordance with work
performed, the completion of milestones does not always coincide with the costs incurred on a contract,
resulting in revenue being recognized in excess of billings. These amounts are recorded in the consolidated
balance sheet as unbilled revenue.
Amounts receivable and unbilled revenue increased from $1.5 million at December 31, 2014, to $2.3 million
at December 31, 2015. These amounts represent 81 days sales at December 31, 2015, compared to 88 days’
sales at December 31, 2014, and reflect specific project billing milestones on current contracts that were
in progress on those dates. Amounts receivable aged greater than 90 days reduced to $327 thousand at
December 31, 2015 from $564 thousand at December 31, 2014. The balance relates to historically slow
paying, but reliable customers. The Company reviews the amounts receivable aging monthly and monitors
the payment status of each invoice. The Company also communicates with slow paying or delinquent
customers on a regular basis regarding the schedule of future payments. At the balance sheet date, $14
2015 Annual Report | Management’s Discussion and Analysis During the year ended December 31, 2015, a foreign currency translation gain of $136 thousand was
recorded, compared to a gain of $7 thousand for the same period in 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
method of accounting based on the ratio of costs incurred to date over the estimated total costs to
complete the contract. While an effort is made to schedule payments on contracts in accordance
with work performed, the completion of milestones does not always coincide with the costs
incurred on a contract, resulting in revenue being recognized in excess of billings. These amounts
are recorded in the consolidated balance sheet as unbilled revenue.
Amounts receivable and unbilled revenue increased from $1.5 million at December 31, 2014, to
$2.3 million at December 31, 2015. These amounts represent 81 days sales at December 31, 2015,
compared to 88 days’ sales at December 31, 2014, and reflect specific project billing milestones on
current contracts that were in progress on those dates. Amounts receivable aged greater than 90
days reduced to $327 thousand at December 31, 2015 from $564 thousand at December 31, 2014.
The balance relates to historically slow paying, but reliable customers. The Company reviews the
amounts receivable aging monthly and monitors the payment status of each invoice. The Company
also communicates with slow paying or delinquent customers on a regular basis regarding the
9
schedule of future payments. At the balance sheet date, $14 thousand has been reserved as
uncollectible and the balance of amounts receivable balances greater than 90 days are considered to
be collectible.
thousand has been reserved as uncollectible and the balance of amounts receivable balances greater than
90 days are considered to be collectible.
Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities generally include trade payables, project-related accruals,
Accounts Payable and Accrued Liabilities
personnel-related costs, and interest on outstanding debt obligations. Accounts payable and
Accounts payable and accrued liabilities generally include trade payables, project-related accruals,
accrued liabilities increased to $6.9 million at December 31, 2015, from $3.8 million at December
personnel-related costs, and interest on outstanding debt obligations. Accounts payable and accrued
31, 2014.
liabilities increased to $6.9 million at December 31, 2015, from $3.8 million at December 31, 2014.
U.S. $ millions
Accounts payable
Accrued liablities
December 31,
2015
December 31,
2014
$
$
$
$
2.4
4.5
6.9
1.5
2.3
3.8
The accounts payable balance increased from $1.5 million at December 31, 2014 to $2.4 million at
The accounts payable balance increased from $1.5 million at December 31, 2014 to $2.4 million at
December 31, 2015. The increase is due primarily to the timing of payments on trade payables. The accrued
December 31, 2015. The increase is due primarily to the timing of payments on trade payables. The
liabilities balance increased from $2.3 million at December 31, 2014 to $4.5 million at December 31, 2015.
accrued liabilities balance increased from $2.3 million at December 31, 2014 to $4.5 million at
The increase is primarily due to increased royalties on a debt financing, interest accrued on notes payable,
legal, and personnel related accruals.
December 31, 2015. The increase is primarily due to increased royalties on a debt financing, interest
accrued on notes payable, legal, and personnel related accruals.
Convertible and Other Notes Payable
The convertible and other notes payable balance of $16.4 million at December 31, 2015 reflects five private
10
placement debt financings that closed during 2015. The first debt financing occurred on January 14, 2015
for $0.5 million; simple interest payable at maturity at an annual rate of 18%. The second debt financing
occurred on February 23, 2015 for $7.3 million; simple interest payable at maturity at an annual rate of 25%,
in which $5.8 million of the proceeds were used to retire the obligations of an outstanding $5.0 million note
(plus accrued interest of $0.8 million) issued on February 6, 2014 and was due and payable on February
6, 2015. The third debt financing occurred on April 2, 2015 in the amount of $1.5 million; simple interest
is payable at maturity at an annual rate of 20%. The fourth debt financing occurred on April 28, 2015 in
the amount of $2.5 million; simple interest is payable at maturity at an annual rate of 20%. The fifth debt
financing occurred on July 13, 2015 in the amount of $3.0 million; simple interest is payable at maturity at
an annual rate of 15%. The two debt financings that occurred during December 2014 totaling $1.o million
have been retired. See Note 7 to the Consolidated Financial Statements for further discussion of the terms of
the notes.
The convertible and other notes payable 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 was 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 was 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 was 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.
Project Financing
The project financing balance at December 31, 2015 remained consistent at $1.3 million from December
31, 2014. The balance increased due to cash received from a reimbursable project development program
entered into with the Canadian government, offset by netting a receivable against the promissory note with
a service provider.
2015 Annual Report | Management’s Discussion and Analysis
10
Unearned Revenue and Deposits
The unearned revenue balance at December 31, 2015 remained consistent at $0.5 million from December
31, 2014. 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, 2015 decreased to $0.1 million from $0.2 million at December 31,
2014 due to recurring payments on an outstanding finance lease obligation.
QUARTERLY FINANCIAL INFORMATION
Selected Quarterly Information
The following table sets forth selected quarterly financial information for Intermap’s eight most
Selected Quarterly Information
recent fiscal quarters. This information is unaudited, but reflects all adjustments of a normal,
The following table sets forth selected quarterly financial information for Intermap’s eight most recent fiscal
recurring nature that are, in the opinion of Management, necessary to present a fair statement of
quarters. This information is unaudited, but reflects all adjustments of a normal, recurring nature that are,
Intermap’s consolidated results of operations for the periods presented. Quarter-to-quarter
in the opinion of Management, necessary to present a fair statement of Intermap’s consolidated results of
comparisons of Intermap’s financial results are not necessarily meaningful and should not be relied
operations for the periods presented. Quarter-to-quarter comparisons of Intermap’s financial results are not
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
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
Q4
2015
Total revenue
$
2.1
$
2.4
$
2.7
$
1.1
$
1.0
$
0.7
$
3.7
$
3.2
Depreciation and amortization
$
0.3
$
0.3
$
0.3
$
0.2
$
0.2
$
0.2
$
0.3
$
0.3
Financing costs
Change in fair value of
derivative intruments
$
0.2
$
0.3
$
0.5
$
1.0
$
1.1
$
0.9
$
1.6
$
3.1
$
(1.2)
$
(0.2)
$
(0.4)
$
(0.2)
$
-
$
3.7
$
0.4
$
(1.5)
Operating income (loss)
$
(4.0)
$
(3.2)
$
(2.5)
$
(4.0)
$
(4.0)
$
(4.4)
$
(1.0)
$
0.2
Net loss
Net loss per share
$
(2.3)
$
(3.4)
$
(2.5)
$
(4.6)
$
(4.9)
$
(9.0)
$
(2.8)
$
(1.4)
- basic and diluted
$
(0.02)
$
(0.04)
$
(0.03)
$
(0.05)
$
(0.05)
$
(0.10)
$
(0.03)
$
-
Adjusted EBITDA
$
(3.6)
$
(2.8)
$
(2.1)
$
(3.5)
$
(3.6)
$
(3.7)
$
(0.5)
$
0.2
Revenue
Revenue
Consolidated revenue for the fourth quarter of 2015 totaled $3.2 million, compared to $1.1 million
Consolidated revenue for the fourth quarter of 2015 totaled $3.2 million, compared to $1.1 million for the
for the same period in 2014, representing a 191% increase.
same period in 2014, representing a 191% increase.
Mapping services revenue for the quarter ended December 31, 2015 totaled $0.4 million, compared
Mapping services revenue for the quarter ended December 31, 2015 totaled $0.4 million, compared to
to $0.6 million for the same period in 2014. Revenue was recognized on contracts in North America
$0.6 million for the same period in 2014. Revenue was recognized on contracts in North America for both
for both periods.
periods.
Professional services revenue was $Nil for the quarter ended December 31, 2015, a slight decrease
Professional services revenue was $Nil for the quarter ended December 31, 2015, a slight decrease from $0.1
from $0.1 million for the same period in 2014 due to timing of contracts.
million for the same period in 2014 due to timing of contracts.
Data licensing revenue for the quarters ended December 31, 2015 and 2014 totaled $2.2 million and
Data licensing revenue for the quarters ended December 31, 2015 and 2014 totaled $2.2 million and $0.5
$0.5 million, respectively. The increase was primarily the result of one large sale from the
million, respectively. The increase was primarily the result of one large sale from the Company’s NEXTMap
Company’s NEXTMap USA dataset totaling $0.7 million and one large sale from the Company’s
USA dataset totaling $0.7 million and one large sale from the Company’s NEXTMap Asia dataset totaling
NEXTMap Asia dataset totaling $1.0 million during the fourth quarter of 2015 with no similar size
$1.0 million during the fourth quarter of 2015 with no similar size sales in the fourth quarter of 2014.
sales in the fourth quarter of 2014.
3DBI software applications revenue increased slightly for the quarter ended December 31, 2015 to $0.6
3DBI software applications revenue increased slightly for the quarter ended December 31, 2015 to
million from $0.5 million for the same period in 2014. The increase was primarily due to new 3DBI software
$0.6 million from $0.5 million for the same period in 2014. The increase was primarily due to new
application contracts in 2015 for the Company’s risk management software application.
3DBI software application contracts in 2015 for the Company’s risk management software
application.
Personnel
12
2015 Annual Report | Management’s Discussion and Analysis
11
Personnel
Personnel expense for the three-month periods ended December 31, 2015 and 2014, totaled $2.3
Personnel expense for the three-month periods ended December 31, 2015 and 2014, totaled $2.3 million
million and $3.0 million, respectively. The decrease is primarily due to decreases in headcount on a
and $3.0 million, respectively. The decrease is primarily due to decreases in headcount on a year-over-year
year-over-year basis.
basis.
Non-cash compensation expense for the quarters ended December 31, 2015 and 2014, totaled
Non-cash compensation expense for the quarters ended December 31, 2015 and 2014, totaled negative
negative $0.1 million and positive $0.1 million, respectively. The decrease was due to an adjustment
$0.1 million and positive $0.1 million, respectively. The decrease was due to an adjustment in the cash-
in the cash-settled awards calculation for the Company’s long-term incentive plan. See Note 12 (h)
settled awards calculation for the Company’s long-term incentive plan. See Note 12 (h) to the Consolidated
to the Consolidated Financial Statements for further discussion.
Financial Statements for further discussion.
Purchased Services and Materials
Purchased Services and Materials
For the three-month periods ended December 31, 2015 and 2014, PS&M expense was $0.1 million
For the three-month periods ended December 31, 2015 and 2014, PS&M expense was $0.1 million and $1.0
and $1.0 million, respectively. The decrease is primarily due to a royalty accrual reversal of $0.8
million, respectively. The decrease is primarily due to a royalty accrual reversal of $0.8 million during the
million during the fourth quarter of 2015.
fourth quarter of 2015.
Travel
Travel
Travel expenses for the three-month periods ended December 31, 2015 and 2014 totaled $0.1
million and $0.2 million, respectively. The decrease is primarily due to a decrease in sales and
Travel expenses for the three-month periods ended December 31, 2015 and 2014 totaled $0.1 million and
$0.2 million, respectively. The decrease is primarily due to a decrease in sales and marketing travel during
marketing travel during 2015.
2015.
Facilities and Other Expenses
For the three-month periods ended December 31, 2015 and 2014, facilities and other expenses were
Facilities and Other Expenses
$0.4 and $0.5 million, respectively. The slight decrease is primarily due to a decrease in board of
For the three-month periods ended December 31, 2015 and 2014, facilities and other expenses were
director compensation during 2015.
$0.4 and $0.5 million, respectively. The slight decrease is primarily due to a decrease in board of director
compensation during 2015.
CONTRACTUAL OBLIGATIONS
CONTRACTUAL OBLIGATIONS
Contractual obligations include (i) operating leases on office locations; (ii) notes payable; and (iii)
finance leases on computer equipment and software. Principal and interest repayments of these
Contractual obligations include (i) operating leases on office locations; (ii) notes payable; and (iii) finance
leases on computer equipment and software. Principal and interest repayments of these obligations are as
obligations are as follows:
follows:
Contractual obligations
Operating leases
Convertible and other
notes payable
Project financing
Finance leases
Total
Payments due by Period (US $ thousands)
Total
$
920
Less than 1 year
$
542
1 - 3 years
193
$
4 - 5 years After 5 years
$
185
$
-
23,925
1,295
121
26,261
$
16,625
1,121
82
18,370
$
7,300
174
24
7,691
$
-
-
-
-
$
12
197
3
$
3
LIQUIDITY AND CAPITAL RESOURCES
LIQUIDITY AND CAPITAL RESOURCES
Management continually assesses liquidity in terms of the ability to generate sufficient cash flow to fund
Management continually assesses liquidity in terms of the ability to generate sufficient cash flow to
the business. Net cash flow is affected by the following items: (i) operating activities, including the level
fund the business. Net cash flow is affected by the following items: (i) operating activities, including
of amounts receivable, unbilled receivables, accounts payable, accrued liabilities, unearned revenue and
the level of amounts receivable, unbilled receivables, accounts payable, accrued liabilities and
deposits; (ii) investing activities, including the purchase of property and equipment; and (iii) financing
activities, including debt financing and the issuance of capital stock.
13
Cash used in operations during the year ended December 31, 2015 totaled $8.2 million, compared to $7.4
million during the same period in 2014. The year-over-year increase in cash used of $0.8 million is due
primarily to changes in working capital balances.
2015 Annual Report | Management’s Discussion and Analysis
12
Net cash used in investing activities totaled $50 thousand for the year ended December 31, 2015, compared
to $249 thousand during the same period in 2014. Net cash used in investing activities for the year ended
December 31, 2015, was for the purchase of computer related equipment of $50 thousand. Net cash
used in investing activities during the year ended December 31, 2014, was for the purchase of computer
related equipment of $609 thousand, offset by proceeds from the sale of property and equipment of $360
thousand.
Net cash generated from financing activities totaled $7.8 million for the year ended December 31, 2015
compared to $5.8 million during the same period in 2014. The net cash generated from financing activities
during the year ended December 31, 2015 resulted from the closing of debt financing arrangements from
which $8.5 million in proceeds were received by the Company, proceeds from the exercise of warrants of
$0.2 million, and proceeds from a long-term reimbursable project funding of $0.1 million; offset by $0.1
million of issuance costs, $0.8 million of transfer to restricted cash and $0.1 million on the repayment of
capital leases. The net cash generated from financing activities during the year ended December 31, 2014
resulted from the closing of a convertible note debt financing totaling $6.0 million and $0.1 million 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 cash position of the Company at December 31, 2015 (cash and cash equivalents) was $Nil, compared
to $0.5 million at December 31, 2014. Working capital decreased to negative $16.4 million as of December
31, 2015 from negative $8.7 million as of December 31, 2014 primarily due to accounts payable and
accrued liabilities increasing by $3.1 million and the current portion of convertible and other notes payable
increasing by $3.8 million. Also, at December 31, 2015 and 2014, working capital includes $2.1 million
and $0.2 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, 2015, the Company generated an operating loss of $9.2 million,
incurred negative adjusted EBITDA of $7.6 million, and negative cash flow from operations of $8.2 million.
Revenue for the year ended December 31, 2015 was $8.6 million, which represents only a $0.3 million
increase in revenue from the year ended December 30, 2014. The Company has a shareholders’ deficiency
of $22.4 million and a working capital deficiency of $16.6 million. In addition, the Company has scheduled
debt repayments of $16.6 million due within twelve months from the balance sheet date upon the
contractual maturity of convertible and other notes payable.
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 secure sales with upfront payments, or obtain further financing, including financing
to replace the debt maturing in 2016. Failure to achieve one or more of these requirements could have a
materially adverse effect on the Company’s financial condition and or results of operations. 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. The Company obtained financing during the year to fund the development of new
product offerings and further financing is required to continue these development and sales efforts until
profitable operations are achieved or product sales with upfront payments are secured.
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.
2015 Annual Report | Management’s Discussion and Analysis 13
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. As at December 31, 2015, the carrying value of the data library is $Nil. In accordance with IFRS,
the Company will review each reporting period for indications that an adjustment to the carrying value may
be necessary.
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:
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, 2015, amounts receivable represented
43% of total assets.
2015 Annual Report | Management’s Discussion and Analysis 14
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.
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 7 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.
2015 Annual Report | Management’s Discussion and Analysis 15
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, 2015. The
standards and amendments did not have a significant impact on the financial statements of the Company.
Amendments to IFRS 2, Share-based payments
In December 2013, the International Accounting Standards (IASB) issued amendments to IFRS 2, Share-
based payments. The amendments clarify vesting conditions by separately defining a performance
condition and a service condition, both of which were previously incorporated within the definition of a
vesting condition. The Company adopted these amendments effective January 1, 2015. The adoption of
these amendments did not have a material impact on the consolidated financial statements.
Amendments to IFRS 13, Fair Value Measurements
In December 2013, the IASB issued amendments to IFRS 13, Fair Value Measurements, which relate to the
measurement of short-term receivables and payables, and the scope of the portfolio exemption. Short term
receivables and payables with no stated interest rate can still be measured at the invoice amount without
discounting, if the effect of discounting is immaterial. The portfolio exemption permits an entity to measure
the fair value of a group of financial assets and financial liabilities on a net basis. The amendment clarifies
that the portfolio exemption applies to all contracts within the scope of IAS 39, Financial Instruments:
Recognition and Measurement (or IFRS 9, Financial Instruments if this has been adopted early), regardless
of whether they meet the definition of financial assets or financial liabilities in IAS 32, Financial Instruments:
Presentation. The Company adopted these amendments effective January 1, 2015. The adoption of these
amendments did not have a material impact on the consolidated financial statements.
FUTURE ACCOUNTING STANDARDS AND INTERPRETATIONS
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.
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.
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.
2015 Annual Report | Management’s Discussion and Analysis 16
IFRS 16, Leases
In January 2016, the International Accounting Standards Board issued IFRS 16, Leases, which specifies how
to recognize, measure, present and disclose leases. The standard provides a single lessee accounting model,
requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less
or the underlying asset has a low value. Consistent with its predecessor, IAS 17, the new lease standard
continues to require lessors to classify leases as operating or finance. IFRS 16 is to be applied retrospectively
for annual periods beginning on or after January 1, 2019. Earlier application is permitted if IFRS 15 Revenue
from contract with customers has also been applied. 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.
Amendments to IAS 16, Property, Plant and Equipment and IAS 38, Intangible
Assets
In May 2014, the International Accounting Standards Board issued amendments to IAS 16, Property,
Plant and Equipment and IAS 38, Intangible Assets. These amendments prohibit entities from using a
revenue-based depreciation method for items of property, plant and equipment. They also introduce a
rebuttable presumption that revenue is not an appropriate basis for amortization of an intangible asset. The
amendments explain that an expected future reduction in selling prices could be indicative of a reduction
of the future economic benefits embodied in an asset. These amendments are to be applied prospectively
for annual periods beginning on or after January 1, 2016. Early adoption is allowed. The Company is
currently evaluating the impact of adopting these amendments 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 29, 2016, 100,237,372 Class A common shares were issued and outstanding. There are no
preferred shares currently issued and outstanding.
As of March 29, 2016, potential dilutive securities include (i) 6,823,850 outstanding share options in the
Company’s share option plan with a weighted average exercise price of C$0.41, and (ii) 24,713,130 warrants
outstanding with a weighted average exercise price of C$0.08. Each option and warrant entitles the holder
to purchase one Class A common share.
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 effective at December 31, 2015.
2015 Annual Report | Management’s Discussion and Analysis 17
Changes in Internal Control over Financial Reporting
During the quarter ended March 31, 2015, Management 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. There have been no additional significant changes in the design of internal control over
financial reporting 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 and have determined, based on that evaluation, that such
disclosure controls and procedures were effective at December 31, 2015.
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.
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.
2015 Annual Report | Management’s Discussion and Analysis 18
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 2015, the Company had one key customer that accounted for 44% of total revenue. During 2014,
35% of the revenue was attributable to the same customer. 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.
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.
2015 Annual Report | Management’s Discussion and Analysis 19
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.
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
2015 Annual Report | Management’s Discussion and Analysis 20
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. Political or significant instability in a region where Intermap is conducting data collection activities,
or where Intermap has clients, could adversely impact Intermap’s business.
Regulatory Approvals
The development and application of certain of the Company’s products requires the approval of applicable
regulatory authorities. A failure to obtain such approval on a timely basis, or material conditions imposed by
such authority in connection with the approval, would materially affect the prospects of the Company.
Aircraft / Radar Lost or Damaged
Although the Company believes that the probability of one of the Company’s aircraft or radar sustaining
significant damage or being lost in its entirety is extremely low, such damage or loss could occur. The
Company expects to have available to it, for data collection purposes, one additional aircraft at any given
time. The risk to the Company of loss from the damage of an aircraft is therefore considered to be minimal.
In the event that a radar mapping system is lost in its entirety through the destruction of the aircraft, it
would take the Company approximately six to nine months to replace the lost equipment, if required.
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.
2015 Annual Report | Management’s Discussion and Analysis 21
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.
2015 Annual Report | Management’s Discussion and Analysis 22
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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, 2015 and December
31, 2014, the consolidated statements of profit and loss and other comprehensive income, changes in
shareholders’ deficiency and cash flows for the years then ended, and notes, comprising a summary of
significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with International Financial Reporting Standards, and for such internal control as
management determines is necessary to enable the preparation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our
audits. We conducted our audits in accordance with Canadian generally accepted auditing standards.
Those standards require that we comply with ethical requirements and plan and perform the audits to
obtain reasonable assurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the consolidated financial statements. The procedures selected depend on our judgment, including
the assessment of the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error. In making those risk assessments, we consider internal control relevant to the
entity’s preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
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, 2015 and December 31, 2014,
and its consolidated financial performance and its consolidated cash flows for the years then ended in
accordance with International Financial Reporting Standards.
Opinion
25
Emphasis of Matter
In our opinion, the consolidated financial statements present fairly, in all material respects, the
Emphasis of Matter
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.
Without modifying our opinion, we draw attention to Note 2(a) in the consolidated financial statements
which indicates that Intermap Technologies Corporation incurred an operating loss of $9,205,000 and
negative cash flows from operations of $8,223,000 for the year ended December 31, 2015 and as at
December 31, 2015 had a shareholders’ deficiency of $22,421,000 and a working capital deficiency of
$16,581,000. In addition, the Company has scheduled debt repayments of $16,625,000 due within twelve
months from the balance sheet date upon the contractual maturity of convertible and notes payable.
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 casts significant doubt about Intermap Technologies
Corporation’s ability to continue as a going concern.
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.
Chartered Accountants, Licensed Public Accountants
Chartered Professional Accountants, Licensed Public Accountants
March 29, 2016
Ottawa, Canada
March 3, 2010
Ottawa, Canada
26
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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
Restricted cash
Amounts receivable
Unbilled revenue
Prepaid expenses
Property and equipment (Note 5)
Intangible assets
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities (Note 6)
Current portion of convertible and other notes payable (Note 7)
Current portion of project financing (Note 8)
Current portion of deferred lease inducements
Unearned revenue and deposits
Warrant liability (Note 13)
Income taxes payable
Obligations under finance leases (Note 9)
Current portion of long-term liabilities (Note 12(h))
Long-term convertible and other notes payable (Note 7)
Long-term project financing (Note 8)
Deferred lease inducements
Obligations under finance leases (Note 9)
Other long-term liabilities (Note 12(h))
Shareholders' deficiency:
Share capital (Note 12(b))
Accumulated other comprehensive income
Contributed surplus (Note 12(c))
Deficit
Going concern (Note 2(a))
Commitments (Note 15)
Subsequent events (Note 20)
See accompanying notes to consolidated financial statements.
See accompanying notes to consolidated financial statements.
On behalf of the Board:
December 31,
2015
December 31,
2014
-
$
801
2,283
11
295
3,390
$
537
-
1,453
63
412
2,465
1,922
-
5,312
$
2,833
13
5,311
$
$
6,872
9,087
1,121
101
467
2,085
5
75
158
19,971
$
3,785
5,313
1,168
137
451
226
2
131
-
11,213
7,300
174
162
34
92
27,733
196,409
(102)
11,578
(230,306)
(22,421)
-
122
311
96
6
11,748
194,377
(57)
11,395
(212,152)
(6,437)
$
5,312
$
5,311
(Signed) Larry G. Garberding
Larry G. Garberding
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 10)
Expenses:
Operating costs (Note 11(a))
Depreciation of property and equipment
Amortization of intangible assets
Operating loss
Gain on disposal of equipment
Change in fair value of derivative instruments
Financing costs (Note 11(b))
Financing income
Gain on foreign currency translation
Loss before income taxes
Income tax (expense) recovery:
Current
Deferred
Net loss for the period
Other comprehensive loss:
Items that are or may be reclassified subsequently to profit or loss:
Foreign currency translation differences
Comprehensive loss for the period
Basic and diluted loss per share
Weighted average number of Class A common
shares - basic & diluted (Note 12(d))
See accompanying notes to consolidated financial statements.
See accompanying notes to consolidated financial statements.
2015
2014
$
8,642
$
8,254
16,860
974
13
17,847
20,718
1,123
103
21,944
(9,205)
(13,690)
94
(2,572)
(6,661)
8
136
(18,200)
(27)
73
46
456
2,035
(2,006)
15
7
(13,183)
-
383
383
$
(18,154)
$
(12,800)
(45)
(94)
$
(18,199)
$
(12,894)
$
(0.19)
$
(0.14)
96,102,755
91,707,540
2015 Annual Report | Consolidated Financial Statements
29
INTERMAP TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIENCY
Consolidated Statements of Changes in Shareholders’ Deficiency
(In thousands of United States dollars)
(In thousands of United States dollars)
Share
Capital
Contributed
Surplus
Cumulative
Translation
Adjustments
Deficit
Total
Balance at December 31, 2013
$
194,337
$
10,671
$
37
$
(199,352)
$
5,693
Comprehensive loss for the period
Share-based compensation
Issuance costs
Deferred tax effect of convertible note
Conversion option of convertible note
40
-
-
-
-
-
408
(5)
(383)
704
(94)
-
-
-
-
(12,800)
-
-
-
-
(12,894)
448
(5)
(383)
704
Balance at December 31, 2014
$
194,377
$
11,395
$
(57)
$
(212,152)
$
(6,437)
Comprehensive loss for the period
Share-based compensation
Exercise of warrants
Exercise of options
Note conversion (Note 7(a))
New warrant issuance
Deferred tax effect of convertible note
-
30
1,004
57
556
385
-
-
294
-
(22)
(16)
-
(73)
(45)
-
-
-
-
-
-
(18,154)
-
-
-
-
-
-
(18,199)
324
1,004
35
540
385
(73)
Balance at December 31, 2015
$
196,409
$
11,578
$
(102)
$
(230,306)
$
(22,421)
See accompanying notes to consolidated financial statements.
See accompanying notes to consolidated financial statements.
2015 Annual Report | Consolidated Financial Statements
30
INTERMAP TECHNOLOGIES CORPORATION
Condensed 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,
2015
2014
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 intangible assets
Share-based compensation expense
Gain on disposal of equipment
Amortization of deferred lease inducements
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 and accrued liabilities
Unearned revenue and deposits
Loss (gain) on foreign currency translation
Investing activities:
Purchase of property and equipment
Proceeds from sale of equipment
Financing activities:
Proceeds from convertible notes and notes payable
Issuance costs of convertible notes and notes payable
Proceeds from reimbursable project funding
Proceeds from exercise of warrants
Proceeds from exercise of options
Increase in restricted cash
Repayment of obligations under finance lease
Repayment of long-term debt and notes payable
Effect of foreign exchange on cash
Decrease in cash and cash equivalents
Cash and cash equivalents, beginning of period
$
(18,154)
$
(12,800)
974
13
638
(94)
(144)
(73)
2,572
6,661
27
(18)
(24)
(896)
169
73
16
37
(8,223)
(50)
-
(50)
8,500
(99)
93
156
35
(801)
(146)
-
7,738
(2)
(537)
537
1,123
103
454
(456)
(41)
(383)
(2,035)
2,006
-
(22)
(10)
5,008
116
(784)
341
(42)
(7,422)
(609)
360
(249)
6,000
(158)
130
-
-
-
(115)
(65)
5,792
(4)
(1,883)
2,420
Cash and cash equivalents, end of period
$
-
$
537
See accompanying notes to consolidated financial statements.
See accompanying notes to consolidated financial statements.
2015 Annual Report | Consolidated Financial Statements
Notes to Consolidated Financial Statements
31
(In thousands of United States dollars, except per share information)
1. Reporting entity:
Intermap Technologies® Corporation (the Company) is incorporated under the laws of Alberta, Canada.
The head office of Intermap is located at 8310 South Valley Highway, Suite 400, Englewood, Colorado, USA
80112. Its registered office is located at 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 consolidated 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, 2015, the
Company incurred an operating loss of $9,205 and negative cash flows from operating activities of
$8,223. The Company has a shareholders’ deficiency of $22,421 and a working capital deficiency of
$16,581. In addition, the Company has scheduled debt repayments of $16,625 due within twelve
months from the consolidated balance sheet date upon the contractual maturity of convertible and
other notes payable.
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 secure sales with upfront payments or obtain additional financing, including
financing to replace the debt maturing in 2016. Failure to achieve one or more of these requirements
could have a materially adverse effect on the Company’s financial condition and / or results of
operations. 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. The Company obtained financing in
2015 (see Note 7) to fund the development and sales efforts of new product and services offerings
and further financing is required to continue these development and sales efforts until profitable
operations are achieved or product sales with upfront payments are secured.
The Company’s future capital requirements will depend on many factors, including, but not limited
to, the market acceptance of its products and services, the timing of payments associated with such
products and services, and debt maturities. 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 consolidated 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
consolidated 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.
32
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
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 29, 2016, the date the Board of Directors approved the consolidated financial statements.
c. Measurement basis:
The consolidated 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 consolidated 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
consolidated 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 and Note 7 –Convertible and Other Notes Payable.
Information about assumptions and estimation uncertainties that have a significant risk of resulting in
a material adjustment within the next financial year include the following:
i. Depreciation and amortization rates:
In calculating the depreciation and amortization expense, management is required to make
estimates of the expected useful lives of property and equipment and intangible assets.
ii. Amounts receivable:
The Company uses historical trends and performs specific account assessments when
determining the allowance for doubtful accounts. These accounting estimates are in respect to
the amounts receivable line item in the Company’s consolidated balance sheet. At December 31,
2015, amounts receivable represented 43% of total assets.
The estimate of the Company’s allowance for doubtful accounts could change from period
to period due to the allowance being a function of the balance and composition of amounts
receivable.
iii. Share-based compensation:
The Company uses the Black-Scholes option-pricing model to determine the grant date fair value
of share-based compensation. The following assumptions are used in the model: dividend yield;
expected volatility; risk-free interest rate; expected option life; and fair value.
Changes to assumptions used to determine the grant date fair value of share-based compensation
awards can affect the amounts recognized in the consolidated financial statements.
2015 Annual Report | Consolidated Financial Statements 33
iv. 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.
v. 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)).
vi. 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 12(h)).
vii. 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 7.
viii. Revenue:
Changes to the assumptions used to measure revenue could impact the amount of revenue
recognized in the consolidated financial statements. (see Note 3(k)).
e. Functional and presentation currency:
These consolidated financial statements are presented in United States dollars, which is the Company’s
functional currency. All financial information presented in United States dollars has been rounded to
the nearest thousand.
f.
Foreign currency translation:
Items included in the financial statements of each of the Company’s subsidiaries are measured using
the currency of the primary economic environment in which the entity operates (the functional
currency). Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transaction. Foreign exchange gains and losses resulting from
2015 Annual Report | Consolidated Financial Statements 34
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. (a U.S. corporation); Intermap Technologies
UK Limited (a U.K. corporation); Intermap Technologies PTY Ltd (a Australian corporation); Intermap
Technologies s.r.o. (a Czech Republic corporation); and a 90% owned subsidiary, PT ExsaMap Asia (a
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 consolidated 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 consolidated 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. Restricted cash:
Restricted cash are amounts to be used to repay promissory notes upon maturity (note 7(f)) and
include cash balances and highly liquid marketable securities with maturity at the date of purchase of
30 days or less.
d. 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.
e. 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
2015 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, 2015 and 2014
Page 7
Restricted cash are amounts to be used to repay promissory notes upon maturity (note 7(f)) and
include cash balances and highly liquid marketable securities with maturity at the date of
(c) Restricted cash:
purchase of 30 days or less.
(d) 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.
(e) 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
35
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
are capitalized and depreciated over the period until the next overhaul. When parts of an item
separate items. Depreciation is calculated over the depreciable amount which is the cost of an
of property and equipment have different useful lives, they are accounted for as separate items.
asset, less its residual value. Depreciation is provided on the straight-line basis over the
Depreciation is calculated over the depreciable amount which is the cost of an asset, less its residual
following useful lives of the assets:
value. Depreciation is provided on the straight-line basis over the following useful lives of the assets:
Assets
Years
Aircraft
Aircraft engines
Mapping equipment - hardware 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 year end
Depreciation methods, useful lives and residual values are reviewed at each financial year end and
and adjusted, if appropriate.
adjusted, if appropriate.
Assets under construction are not depreciated until available for use by the Company.
Assets under construction are not depreciated until available for use by the Company. Expenditures for
Expenditures for maintenance and repairs are expensed when incurred.
maintenance and repairs are expensed when incurred.
The cost of replacing an item of property and equipment is recognized in the carrying amount
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 part will flow to
of the item if it is probable that the future economic benefits embodied within the part will flow
the Company, and its cost can be measured reliably. The carrying amount of the replaced part is
to the Company, and its cost can be measured reliably. The carrying amount of the replaced
derecognized. The costs of the day-to-day servicing of property and equipment are recognized in profit
or loss as incurred.
Gains and losses on disposal of property and equipment are determined by comparing the proceeds
from disposal with the carrying amount, and are recognized net of costs associated with the disposal
within other income in net loss for the period.
f.
Intangible assets:
Identifiable intangible assets represent assets acquired in a business combination, and internally
developed assets. Upon acquisition, identifiable intangible assets are recorded at fair value and are
carried at cost less accumulated amortization. These intangible assets held by the Company are
amortized on a straight-line basis, based on the estimated useful life of the asset.
The intangible assets 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.
2015 Annual Report | Consolidated Financial Statements
36
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.
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.
2015 Annual Report | Consolidated Financial Statements 37
k. 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.
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. Software subscriptions:
Revenue from software applications 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.
l.
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.
m. 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.
2015 Annual Report | Consolidated Financial Statements 38
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.
n. 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.
o. 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.
2015 Annual Report | Consolidated Financial Statements INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
39
Years ended December 31, 2015 and 2014
Page 15
The Company derecognizes a financial liability when its contractual obligations are discharged,
The Company derecognizes a financial liability when its contractual obligations are discharged,
cancelled or expire.
cancelled or expire.
Such financial liabilities are recognized initially at fair value plus any directly attributable
Such financial liabilities are recognized initially at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, these financial liabilities are measured at
transaction costs. Subsequent to initial recognition, these financial liabilities are measured at
amortized cost using the effective interest method.
amortized cost using the effective interest method.
The following is a summary of the classification the Company has applied to each of its
The following is a summary of the classification the Company has applied to each of its significant
significant categories of financial instruments outstanding:
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 and other notes payable
Other long-term liabilities
Warrant liability
Classification:
Loans and receivables
Loans and receivables
Loans and receivables
Other liabilities
Other liabilities
Other liabilities
Other liabilities
Financial liability at fair value
through profit and loss
v. Share capital:
Share capital:
v.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
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.
ordinary shares are recognized as a deduction from equity, net of any tax effects.
vi. Compound financial instruments:
Compound financial instruments:
vi.
Compound financial instruments issued by the Company comprise convertible notes
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
denominated in United States dollars that can be converted to share capital at the option of the
holder.
holder.
The liability component of a compound financial instrument is recognized initially at the fair
The liability component of a compound financial instrument is recognized initially at the fair value
value of a similar liability that does not have an equity conversion option. The equity
of a similar liability that does not have an equity conversion option. The equity component is
component is recognized initially at the difference between the fair value of the compound
recognized initially at the difference between the fair value of the compound financial instrument
financial instrument as a whole and the fair value of the liability component. Any directly
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.
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
Subsequent to initial recognition, the liability component of a compound financial instrument
compound financial instrument is not re-measured subsequent to initial recognition.
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.
p. 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, 2015.
2015 Annual Report | Consolidated Financial Statements
40
i. Amendments to IFRS 2, Share-based Payments
In December 2013, the International Accounting Standards (IASB) issued amendments to IFRS
2, Share-based Payments. The amendments clarify vesting conditions by separately defining
a performance condition and a service condition, both of which were previously incorporated
within the definition of a vesting condition. The Company adopted these amendments effective
January 1, 2015. The adoption of these amendments did not have a material impact on the
consolidated financial statements.
ii. Amendments to IFRS 13, Fair Value Measurements
In December 2013, the IASB issued amendments to IFRS 13, Fair Value Measurements, which
relate to the measurement of short-term receivables and payables, and the scope of the portfolio
exemption. Short term receivables and payables with no stated interest rate can still be measured
at the invoice amount without discounting, if the effect of discounting is immaterial. The portfolio
exemption permits an entity to measure the fair value of a group of financial assets and financial
liabilities on a net basis. The amendment clarifies that the portfolio exemption applies to all
contracts within the scope of IAS 39, Financial Instruments: Recognition and Measurement (or
IFRS 9, Financial Instruments if this has been adopted early), regardless of whether they meet the
definition of financial assets or financial liabilities in IAS 32, Financial Instruments: Presentation.
The Company adopted these amendments effective January 1, 2015. The adoption of these
amendments 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.
2015 Annual Report | Consolidated Financial Statements iii.
IFRS 16, Leases
41
In January 2016, the International Accounting Standards Board issued IFRS 16, Leases, which
specifies how to recognize, measure, present and disclose leases. The standard provides a single
lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless
the lease term is 12 months or less or the underlying asset has a low value. Consistent with its
predecessor, IAS 17, the new lease standard continues to require lessors to classify leases as
operating or finance. IFRS 16 is to be applied retrospectively for annual periods beginning on
or after January 1, 2019. Earlier application is permitted if IFRS 15 Revenue from contract with
customers has also been applied. 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.
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2015 and 2014
Page 19
In May 2014, the International Accounting Standards Board issued amendments to IAS 16,
iv. Amendments to IAS 16, Property, Plant and Equipment and IAS 38, Intangible Assets
Property, Plant and Equipment and IAS 38, Intangible Assets. These amendments prohibit
In May 2014, the International Accounting Standards Board issued amendments to IAS 16,
entities from using a revenue-based depreciation method for items of property, plant and
Property, Plant and Equipment and IAS 38, Intangible Assets. These amendments prohibit entities
equipment. They also introduce a rebuttable presumption that revenue is not an appropriate
from using a revenue-based depreciation method for items of property, plant and equipment.
They also introduce a rebuttable presumption that revenue is not an appropriate basis for
basis for amortization of an intangible asset. The amendments explain that an expected future
amortization of an intangible asset. The amendments explain that an expected future reduction
in selling prices could be indicative of a reduction of the future economic benefits embodied in
an asset. These amendments are to be applied prospectively for annual periods beginning on or
after January 1, 2016. Early adoption is allowed. The Company is currently evaluating the impact of
adopting these amendments on the consolidated financial statements.
evaluating the impact of adopting these amendments on the consolidated financial statements.
reduction in selling prices could be indicative of a reduction of the future economic benefits
embodied in an asset. These amendments are to be applied prospectively for annual periods
beginning on or after January 1, 2016. Early adoption is allowed. The Company is currently
5. Property and equipment:
5. Property and equipment:
Property and equipment
Aircraft
and
engines
Radar and
mapping
equipment
Furniture
and fixtures
Leases
Under
construction
Total
Balance at December 31, 2013
$
2,101
$
1,175
$
-
$
102
$
-
$
3,378
Additions
Finance Lease
Disposals
Depreciation
Transfer from under construction
95
-
-
(488)
-
276
35
(2)
(544)
-
8
(2)
-
-
-
112
-
(64)
(89)
118
118
-
-
-
(118)
609
35
(66)
(1,123)
-
Balance at December 31, 2014
$
1,708
$
940
$
6
$
179
$
-
$
2,833
Additions
Finance Lease
Depreciation
-
-
(462)
36
13
(434)
-
-
(1)
-
-
(77)
14
-
-
50
13
(974)
Balance at December 31, 2015
$
1,246
$
555
$
5
$
102
$
14
$
1,922
Property and equipment
Aircraft
and
engines
Radar and
mapping
equipment
Furniture
and fixtures
Leases
Under
construction
Total
Cost
$
10,951
$
27,393
$
372
$
921
$
-
$
39,637
Accumulated depreciation
(9,243)
(26,453)
(366)
(742)
-
(36,804)
Balance at December 31, 2014
$
1,708
$
940
$
6
$
179
$
-
$
2,833
Cost
$
10,951
$
27,346
$
372
$
921
$
14
$
39,604
Accumulated depreciation
(9,705)
(26,791)
(367)
(819)
-
(37,682)
Balance at December 31, 2015
$
1,246
$
555
$
5
$
102
$
14
$
1,922
During the twelve months ended December 31, 2015, the Company disposed of fully depreciated
assets of $96, recognized a gain of $94 on the sale of those assets, and received cash proceeds of $Nil.
The balance of the proceeds is included in accounts receivable at December 31, 2015.
2015 Annual Report | Consolidated Financial Statements
42
1,513
2,259
13
INTERMAP TECHNOLOGIES CORPORATION
3,785
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
$
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
INTERMAP TECHNOLOGIES CORPORATION
(In thousands of United States dollars, except per share information)
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Years ended December 31, 2015 and 2014
(In thousands of United States dollars, except per share information)
(In thousands of United States dollars, except per share information)
During the twelve months ended December 31, 2015, the Company disposed of fully depreciated assets of
$96, recognized a gain of $94 on the sale of those assets, and received cash proceeds of $Nil. The balance of
6. Accounts payable and accrued liabilities:
Years ended December 31, 2015 and 2014
Years ended December 31, 2015 and 2014
the proceeds is included in accounts receivable at December 31, 2015.
6. Accounts payable and accrued liabilities:
6. Accounts payable and accrued liabilities:
6. Accounts payable and accrued liabilities:
Accounts payable
Accrued liablities(1)
Other taxes payable
Accounts payable
Accrued liablities(1)
Accounts payable
Other taxes payable
Accrued liablities(1)
(1) Accrued liabilities include $2,421 of accrued interest and $1,129 of accrued royalties on
Other taxes payable
December 31,
2014
December 31,
1,513
December 31,
2014
2,259
2014
13
1,513
3,785
2,259
$
13
3,785
December 31,
2015
December 31,
2,362
December 31,
2015
4,509
2015
1
2,362
$
$
6,872
4,509
2,362
$
1
4,509
$
6,872
1
6,872
convertible and other notes payable (2014 – $737 and nil).
$
$
$
$
$
Page 21
Page 21
Page 21
convertible and other notes payable (2014 – $737 and nil).
convertible and other notes payable (2014 – $737 and nil).
$
(1) Accrued liabilities include $2,421 of accrued interest and $1,129 of accrued royalties on
(1) Accrued liabilities include $2,421 of accrued interest and $1,129 of accrued royalties on convertible and other notes payable
7. Convertible and other notes payable:
(1) Accrued liabilities include $2,421 of accrued interest and $1,129 of accrued royalties on
(2014 – $737 and nil).
The following table details the liability and equity components of each convertible and other notes
7. Convertible and other notes payable:
7. Convertible and other notes payable:
payable balance at December 31, 2015:
The following table details the liability and equity components of each convertible and other notes
The following table details the liability and equity components of each convertible and other notes payable
7. Convertible and other notes payable:
6. Accounts payable and accrued liabilities:
April 28,
payable balance at December 31, 2015:
balance at December 31, 2015:
2015
13, 2015
Total
Closing Date of Note
The following table details the liability and equity components of each convertible and other notes
April 28,
July
April
$
2,500
$
3,000
Issuance of notes payable
28, 2015
13, 2015
2015
(31)
(14)
Transaction costs
Closing Date of Note
payable balance at December 31, 2015:
Issuance of notes payable
$
Net proceeds
Transaction costs
Fair value of warrants recorded in equity
Closing Date of Note
Net proceeds
Warrant liability (on date of issuance)
Years ended December 31, 2015 and 2014
7,300
7,280
(20)
April
-
1, 2015
7,280
-
500
471
(29)
February
-
23, 2015
471
(118)
January
$
500
14, 2015
(29)
February
$
7,300
23, 2015
(20)
February
23, 2015
April
1,500
(5)
January
14, 2015
14,800
Total
(99)
April
July
1, 2015
1, 2015
$
$
$
$
December 31,
$
$
$
14,800
$
14,701
(99)
January
(271)
14, 2015
14,701
(118)
3,000
2,986
(14)
-
13, 2015
2,986
-
1,500
2,500
1,495
2,469
(5)
(31)
Accounts payable
April 28,
July
(271)
-
Accrued liablities(1)
2015
1,495
2,469
-
-
Other taxes payable
-
(271)
-
103
110
21
(271)
7,300
$
2,500
3,000
500
2,075
INTERMAP TECHNOLOGIES CORPORATION
-
-
(118)
(118)
(14)
(20)
(31)
(29)
16,387
456
1,334
$
2,490
103
110
21
2,075
Notes to Consolidated Financial Statements
471
7,280
2,469
2,986
(456)
(1,334)
(2,490)
(9,087)
16,387
456
1,334
2,490
$
$
$
(1) Accrued liabilities include $2,421 of accrued interest and $1,129 of accrued royalties on
(In thousands of United States dollars, except per share information)
7,300
$
-
$
-
$
-
-
-
-
-
(456)
(1,334)
(2,490)
(9,087)
(118)
-
-
-
convertible and other notes payable (2014 – $737 and nil).
Years ended December 31, 2015 and 2014
-
$
$
-
1,829
Fair value of warrants recorded in equity
Effective interest incurred on note discount
Issuance of notes payable
Warrant liability (on date of issuance)
Transaction costs
Carrying amount of notes payable
Effective interest incurred on note discount
Net proceeds
Less current portion
Carrying amount of notes payable
Long-term portion of notes payable
Fair value of warrants recorded in equity
Less current portion
Warrant liability (on date of issuance)
Long-term portion of notes payable
-
$
$
Effective interest incurred on note discount
The following table details the liability and equity components of each convertible and other notes
7. Convertible and other notes payable:
The following table details the liability and equity components of each convertible and other notes payable
456
$
2,998
Carrying amount of notes payable
payable balance at December 31, 2014:
balance at December 31, 2014:
The following table details the liability and equity components of each convertible and other notes
Less current portion
payable balance at December 31, 2014:
Long-term portion of notes payable
(2,998)
The following table details the liability and equity components of each convertible and other notes
December 26,
December
$
$
-
-
26, 2014
2014
Total
-
1,829
1,500
-
(5)
9,109
1,829
(1,809)
$
9,109
$
7,300
(271)
(1,809)
-
7,300
$
110
6. Accounts payable and accrued liabilities:
-
12
$
-
2,998
12
(2,998)
$
2,998
$
-
(2,998)
(2,490)
December 12,
December
-
$
12, 2014
2014
$
14,800
$
(99)
$
$
-
21
(271)
(118)
$
16,387
(456)
December 31,
2015
(1,334)
(1,809)
(9,087)
14,701
$
$
$
$
2,490
1,334
9,109
1,495
7,300
2,075
Total
$
$
$
$
$
$
$
7,300
103
$
$
12
$
Proceeds from convertible note
Transaction costs
The following table details the liability and equity components of each convertible and other notes
Proceeds from convertible note
Net proceeds
Transaction costs
$
payable balance at December 31, 2014:
Contributed surplus-conversion option
Net proceeds
Warrant liability (on date of issuance)
500
(34)
Closing Date of Note
500
466
(34)
(16)
466
(57)
$
Issuance of notes payable
Transaction costs
December 26,
500
$
Accounts payable
2014
(31)
Accrued liablities(1)
Other taxes payable
April 28,
2,362
2015
4,509
1
2,500
(31)
6,872
5,000
4,907
(93)
(598)
4,907
(673)
$
Total
$
$
$
$
$
February
-
$
7,300
$
payable balance at December 31, 2015:
7, 2014
February
5,000
7, 2014
(93)
December 12,
$
2014
Contributed surplus-conversion option
Effective interest incurred on note discount
Warrant liability (on date of issuance)
Carrying amount of notes payable
Effective interest incurred on note discount
Proceeds from convertible note
Transaction costs
$
Carrying amount of notes payable
a. February 7, 2014 convertible promissory note:
Net proceeds
(a) February 7, 2014 convertible promissory note:
February
(1) Accrued liabilities include $2,421 of accrued interest and $1,129 of accrued royalties on
7, 2014
December 12,
(598)
(16)
983
6
2014
(673)
(57)
Fair value of warrants recorded in equity
4,619
399
Warrant liability (on date of issuance)
6
983
$
$
convertible and other notes payable (2014 – $737 and nil).
$
$
Total
2,469
$
500
(31)
$
$
500
(34)
$
Effective interest incurred on note discount
4,619
399
295
-
-
6,000
(158)
21
7. Convertible and other notes payable:
Carrying amount of notes payable
466
469
4,907
$
2,998
$
5,842
2,490
$
1,334
$
9,109
$
456
$
16,387
The following table details the liability and equity components of each convertible and other notes
Long-term portion of notes payable
Carrying amount of notes payable
Effective interest incurred on note discount
(a) February 7, 2014 convertible promissory note:
Contributed surplus-conversion option
Warrant liability (on date of issuance)
(16)
(83)
Less current portion
(57)
(100)
payable balance at December 31, 2015:
6
On February 7, 2014, the Company issued convertible promissory notes totaling $5,000. Simple
(598)
interest is payable at maturity at an annual rate of 16%. The notes are convertible into 12,367,054
(673)
$
-
common shares of the Company at any time at the option of the holders. Under the terms of the
983
notes, the accrued interest payable on any converted principal balances will be waived at the time
4,619
$
of conversion. The notes also include 3,091,572 detachable warrants to purchase Class A common
shares at a per share price of C$0.56 that expire on February 7, 2017. The notes are secured by a second
2,500
$
priority security interest in the Company’s amounts receivable and its two aircraft. The noteholder
(31)
has a general security interest in the remaining assets of the Company on a pari pasu basis with the
December 12, 2014 and December 26, 2014 convertible note holder. Any unconverted principal and
accrued interest balance is payable at maturity on February 6, 2015. The Company has the option, after
3,000
payable balance at December 31, 2014:
(14)
Issuance of notes payable
Transaction costs
(a) February 7, 2014 convertible promissory note:
$
July
13, 2015
Closing Date of Note
Net proceeds
$
(2,998)
2,986
$
295
399
9
Fair value of warrants recorded in equity
Warrant liability (on date of issuance)
Proceeds from convertible note
Transaction costs
Effective interest incurred on note discount
(697)
(2,490)
(830)
-
$
998
$
1,500
(5)
$
7,300
$
500
$
14,800
(20)
(29)
(99)
December 26,
2,469
2014
-
-
$
December 12,
1,495
2014
(271)
-
$
-
-
500
(31)
12
21
110
(34)
1,829
103
(93)
2,075
$
The following table details the liability and equity components of each convertible and other notes
April 28,
2015
April
5,313
1, 2015
Page 21
December 31,
2014
$
1,513
2,259
13
2015
2,362
4,509
1
6,872
$
3,785
Page 21
December 31,
2014
April
1,513
February
1, 2015
23, 2015
2,259
January
14, 2015
Total
$
1,500
$
13
7,300
$
500
$
14,800
(5)
3,785
(20)
1,495
7,280
(271)
-
110
-
-
1,829
(29)
471
-
(118)
103
(99)
14,701
(271)
(118)
2,075
(1,334)
(1,809)
(456)
(9,087)
$
-
$
7,300
$
-
$
7,300
February
January
23, 2015
14, 2015
Total
7,280
February
14,701
471
-
7, 2014
-
Total
(271)
-
500
$
(118)
5,000
(118)
$
6,000
(158)
5,842
(697)
(830)
998
6,000
July
$
(158)
13, 2015
$
6,000
5,842
(158)
3,000
$
(697)
(14)
$
5,842
(830)
2,986
(697)
998
(830)
-
5,313
-
998
$
$
5,000
(93)
$
5,313
12
500
469
(31)
(83)
469
(100)
December 26,
Net proceeds
(83)
9
2014
(100)
295
9
Carrying amount of notes payable
Net proceeds
$
2,998
$
2,490
469
$
1,334
$
466
9,109
$
456
4,907
$
16,387
Less current portion
Contributed surplus-conversion option
(2,998)
(2,490)
(83)
(1,334)
(456)
(9,087)
Long-term portion of notes payable
Warrant liability (on date of issuance)
Effective interest incurred on note discount
(100)
9
$
-
$
-
$
-
$
7,300
$
-
7,300
(1,809)
(16)
(57)
6
(598)
(673)
$
983
Carrying amount of notes payable
$
295
$
399
$
4,619
$
5,313
The following table details the liability and equity components of each convertible and other notes
payable balance at December 31, 2014:
(a) February 7, 2014 convertible promissory note:
December 26,
December 12,
February
2014
2014
7, 2014
Total
Proceeds from convertible note
$
500
$
500
$
5,000
$
6,000
Transaction costs
Net proceeds
Contributed surplus-conversion option
Warrant liability (on date of issuance)
Effective interest incurred on note discount
(31)
469
(83)
(100)
9
(34)
466
(16)
(57)
6
(93)
4,907
(598)
(673)
983
(158)
5,842
(697)
(830)
998
Carrying amount of notes payable
$
295
$
399
$
4,619
$
5,313
(a) February 7, 2014 convertible promissory note:
2015 Annual Report | Consolidated Financial Statements
43
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
option pricing model with the following assumptions: 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. The fair value of the convertible notes at February 7, 2014 was
determined to be $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 the
term of the notes using the effective interest method. The amount of the convertible note classified as
equity is $598 and has been recorded in contributed surplus.
On February 23, 2015, the note and related accrued interest were retired (see Note 7(e)) and the
12,367,054 conversion shares were canceled.
b. December 12, 2014 convertible promissory note:
On December 12, 2014, the Company issued a convertible promissory note for $500. Simple interest
was payable at maturity at an annual rate of 16%. The note was 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 was waived at the time of conversion.
The note also included 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. On June 12, 2015, the holder converted the
note into 5,741,187 Class A common shares at a value of $540, which included accrued interest of $40,
which was waived upon conversion. The amount of the convertible note classified as equity of $16 has
been reclassified from contributed surplus to share capital upon conversion.
c. December 26, 2014 convertible promissory note:
On December 26, 2014, the Company issued a convertible promissory note for $500. Simple interest
was payable at maturity at an annual rate of 18%. The note was 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 matured on March 31, 2015 and was
rolled into the April 1, 2015 note. The related conversion shares were canceled.
d.
January 14, 2015 note payable:
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 warrants to purchase
Class A common shares of the Company, of which 1,469,834 warrants were issued at a per share price
of C$0.08 and expire on January 21, 2018. The remaining 4,530,166 warrants were issued at a per share
price of US$0.06 and expire on May 1, 2018. The principal and accrued interest balance is payable at
maturity on January 14, 2016. The Company has the option upon sixty days’ notice, to repay the note
at 118% of the outstanding principal balance. The fair value of the prepayment option at December 31,
2015 was $Nil. At December 31, 2015, $87 of accrued interest is included in accrued liabilities.
In determining the fair value of the warrants at inception, the Company used the Black-Scholes option
pricing model with the following assumptions: average volatility rate of 58.6%; risk-free interest rate of
1.00%; expected life of three years; and an exchange rate of 0.78672. The value of $118 was established
2015 Annual Report | Consolidated Financial Statements 44
on January 14, 2015. The estimated discount rate is 28% which is subject to estimation uncertainty. The
discount to the note payable is being amortized over the term of the note using the effective interest
method.
e. February 23, 2015 note payable:
On February 23, 2015, the Company entered into promissory note agreements with Vertex One Asset
Management Inc. (Vertex) 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 net revenues into perpetuity. Of the $7,300 proceeds, $5,800 was used to retire a $5,000
convertible promissory note (plus accrued interest of $800) which was issued on February 7, 2014, and
became due on February 6, 2015. 12,367,054 conversion shares associated with the February 7, 2014
note were cancelled with the retirement of the note. The net proceeds to the Company were $1,500.
The promissory 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. The fair value of the prepayment option at December 31,
2015 was $Nil. At December 31, 2015, $1,550 of accrued interest and $1,129 of accrued royalty payable
is included in accrued liabilities.
As a result of the 17.5% royalty of net revenue being payable in perpetuity, the Company has
recognized the $7,300 promissory note as a perpetual debt instrument with a floating rate of interest.
In the initial year of the debt, interest recognized will be equal to the stated interest rate of 25%, the
amortized portion of the scheduled repayment of $7,300 on February 25, 2016 plus related transaction
costs using the effective interest method, and 17.5% of net revenue recognized during the period.
Subsequent to the initial year, interest will be recognized in an amount equal to 17.5% of net revenue
earned during the period. The face amount of the debt will be carried as a liability until such time as
the royalty is either retired, or it is projected that future royalty streams will be insufficient to support
the carrying amount of the liability.
In connection with the closing of the February 23, 2015 note payable, the December 12, 2014 and
December 26, 2014 notes and associated warrants were assigned to Vertex pursuant to an agreement
between Vertex and the December 12 and December 26 note holder. The notes are secured by a first
priority position in the Company’s amounts receivable and its two aircraft, and a general security
interest in the remaining assets of the Company.
f. April 1, 2015 note payable:
On April 1, 2015, the Company issued a promissory note for $1,500 to Vertex. Simple interest is payable
at maturity at an annual rate of 20%. The note also includes 9,178,266 detachable warrants to purchase
Class A common shares of the Company at a per share price of US$0.07 and expire on April 1, 2018.
Under the terms of the financing, the holder retired an outstanding $500 note (see Note 7(c)). The
net proceeds to the Company were $1,000. The principal and accrued interest balance is payable at
maturity on April 1, 2016. The Company has the option upon thirty days’ notice, to repay the note at
120% of the outstanding principal balance. The fair value of the prepayment option at December 31,
2015 was $Nil. At December 31, 2015, $225 of accrued interest is included in accrued liabilities.
In determining the fair value of the warrants at inception, the Company used the Black-Scholes option
pricing model with the following assumptions: average volatility rate of 62.0%; risk-free interest rate of
.49%; expected life of three years; and an exchange rate of 0.79289. The value of $271 was established
on April 1, 2015. The estimated discount rate is 23% which is subject to estimation uncertainty. The
discount to the note payable is being amortized over the term of the note using the effective interest
method.
2015 Annual Report | Consolidated Financial Statements 45
g. April 28, 2015 note payable:
On April 28, 2015, the Company issued a promissory note for $2,500 to Vertex. Simple interest is
payable at maturity at an annual rate of 20%. The principal and accrued interest balance is payable at
maturity on April 27, 2016. The Company has the option upon thirty days’ notice, to repay the note at
120% of the outstanding principal balance. The fair value of the prepayment option at December 31,
2015 was $Nil. At December 31, 2015, $344 of accrued interest is included in accrued liabilities.
In addition, the Company entered into an amending agreement with Vertex, by which the Company
agreed to establish a cash sweep account to restrict a certain portion of the Company’s cash collections
from net revenues generated subsequent to the execution of the agreement, to be used to repay the
promissory notes upon maturity. At December 31, 2015 $801 is included in restricted cash subject
to the amending agreement, which is $449 short of the balance required under the terms of the
agreement, resulting in a breach in the terms of the amending agreement. At December 31, 2015,
$8,631 is included in current portion of convertible and other notes payable subject to the amending
agreement. There was no change in the status of this agreement as of March 29, 2016.
h.
July 13, 2015 note payable:
On July 13, 2015, the Company issued a promissory note for $3,000 to Vertex. Simple interest is payable
at maturity at an annual rate of 15%. The principal and accrued interest balance is payable at maturity
on January 9, 2016. The Company has the option upon thirty days’ notice, to repay the note at 107.5%
of the outstanding principal balance. The fair value of the prepayment option at December 31, 2015
was $Nil. At December 31, 2015, $215 of accrued interest is included in accrued liabilities.
8. Project financing:
INTERMAP TECHNOLOGIES CORPORATION
Project financing includes a promissory note with a service provider. The note bears interest at 8% per
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
annum and is secured by a last priority lien on an aircraft owned by the Company. As of December 31, 2015,
the balance of the note is $1,110.
Years ended December 31, 2015 and 2014
Page 27
Additionally, the project financing balance includes reimbursable project development funds provided
installments totaling $93 were received. The funding is repayable upon the completion of a specific
by a corporation designed to enable the development and commercialization of geomatics solutions in
Canada. During the twelve months ended December 31, 2015, two quarterly installments totaling $93 were
development project and the first sale of any of the resulting product(s). Repayment is to be made in
received. The funding is repayable upon the completion of a specific development project and the first sale
quarterly installments equal to the lesser of 20% of the funding amount or 25% of the prior quarter’s
of any of the resulting product(s). Repayment is to be made in quarterly installments equal to the lesser of
sales.
20% of the funding amount or 25% of the prior quarter’s sales.
Promissory note payable
Reimbursable project funding
Less current portion
December 31,
2015
December 31,
2014
$
1,110
185
$
1,168
122
1,295
(1,121)
1,290
(1,168)
Long-term portion of project financing
$
174
$
122
2015 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, 2015 and 2014
Page 29
(b) Financing costs:
For the twelve months ended December 31,
Interest on notes payable
Accretion of discounts recognized on notes payable
Royalty associated with note payable
Interest on project financing
Interest on finance lease
2015
2014
$
2,668
$
1,228
2,751
1,129
94
19
650
-
99
29
$
6,661
$
2,006
The authorized share capital of the Company consists of an unlimited number of Class A common
shares and an unlimited number of Class A participating preferred shares. There are no Class A
participating preferred shares outstanding.
(b) Issued:
Class A common shares
Shares
Amount
Shares
Amount
December 31, 2015
Number of
December 31, 2014
Number of
Balance, beginning of period:
Unrestricted shares
Restricted shares held in escrow
Issuance of common shares from
conversion of convertible note
Conversion option of convertible note
Issuance of warrants
Warrant exercise
Option exercise
Share-based compensation
Restricted shares released from
escrow and cancelled
Balance, end of period:
91,782,665
$
194,377
91,613,401
$
194,337
-
526,098
5,741,187
2,508,020
116,250
89,250
-
-
-
-
540
16
385
1,004
57
30
-
-
-
-
-
-
-
-
-
-
-
-
-
100,237,372
$
196,409
91,782,665
$
194,377
169,264
40
(526,098)
On September 15, 2015, 108,750 Class A common shares were issued upon the exercise of options
with a grant date fair value of $21 for cash proceeds of $33.
On August 28, 2015, 7,500 Class A common shares were issued upon the exercise of options with a
grant date fair value of $1 for cash proceeds of $2.
46
INTERMAP TECHNOLOGIES CORPORATION
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
(In thousands of United States dollars, except per share information)
(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, 2015 and 2014
Years ended December 31, 2015 and 2014
Page 28
Page 28
9. Finance lease liabilities:
9. Finance lease liabilities:
Years ended December 31, 2015 and 2014
9. Finance lease liabilities:
Finance lease liabilities are payable as follows:
Finance lease liabilities are payable as follows:
Finance lease liabilities are payable as follows:
9. Finance lease liabilities:
Page 28
12. Share capital:
(a) Authorized:
Finance lease liabilities are payable as follows:
December 31, 2015
December 31, 2015
December 31, 2014
December 31, 2014
December 31, 2015
December 31, 2014
Future
Future
minimum
minimum
lease
lease
payments
payments
Future
minimum
lease
Interest (1)
Interest (1)
Present
Present
value of
value of
minimum
Present
minimum
lease
value of
lease
minimum
payments
payments
lease
Future
Future
minimum
minimum
lease
Future
lease
minimum
payments
payments
lease
Interest (1)
Interest (1)
Present
Present
value of
value of
minimum
Present
minimum
lease
value of
lease
minimum
payments
payments
lease
Less than one year
Less than one year
(current portion)
(current portion)
Less than one year
(current portion)
Between one and five years
Between one and five years
(long-term portion)
(long-term portion)
Between one and five years
(long-term portion)
$
$
(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%.
$
payments
Interest (1)
payments
payments
Interest (1)
payments
$
$
82
82
$
7
$
7
$
$
75
75
$
$
150
150
$
$
19
19
$
$
131
131
$
82
$
7
$
75
39
39
121
121
5
5
12
12
$
$
39
121
$
$
$
5
12
$
34
109
150
$
105
105
255
255
$
$
$
19
9
9
28
28
$
$
34
34
109
109
$
131
96
96
227
227
96
227
$
$
9
28
$
$
$
105
255
(1)
Interest rate ranging from 7.48% to 8.20%.
In October 2015, the Company entered into a finance lease to purchase a new copy machine for $13
In October 2015, the Company entered into a finance lease to purchase a new copy machine for $13
In October 2015, the Company entered into a finance lease to purchase a new copy machine for $13
(computer hardware). The lease bears interest at an implicit rate of 7.48% and is secured by the
(computer hardware). The lease bears interest at an implicit rate of 7.48% and is secured by the underlying
In October 2015, the Company entered into a finance lease to purchase a new copy machine for $13
(computer hardware). The lease bears interest at an implicit rate of 7.48% and is secured by the
underlying assets. The lease matures in October 2020.
assets. The lease matures in October 2020.
(computer hardware). The lease bears interest at an implicit rate of 7.48% and is secured by the
underlying assets. The lease matures in October 2020.
underlying assets. The lease matures in October 2020.
In December 2014, the Company entered into a finance lease to purchase $35 of new telephone
In December 2014, the Company entered into a finance lease to purchase $35 of new telephone equipment
In December 2014, the Company entered into a finance lease to purchase $35 of new telephone
equipment (computer hardware). The lease bears interest at an implicit rate of 9.65% and is secured
In December 2014, the Company entered into a finance lease to purchase $35 of new telephone
(computer hardware). The lease bears interest at an implicit rate of 9.65% and is secured by the underlying
equipment (computer hardware). The lease bears interest at an implicit rate of 9.65% and is secured
by the underlying assets. The lease matures in December 2019.
equipment (computer hardware). The lease bears interest at an implicit rate of 9.65% and is secured
assets. The lease matures in December 2019.
by the underlying assets. The lease matures in December 2019.
by the underlying assets. The lease matures in December 2019.
10. Revenue:
10. Revenue:
10. Revenue:
Details of revenue are as follows:
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,
10. Revenue:
2014
2014
2015
2015
For the twelve months ended December 31,
2015
$
$
$
2014
$
$
$
3,822
3,822
3,822
365
365
365
3,084
3,084
3,084
1,371
1,371
1,371
8,642
8,642
8,642
2,886
2,886
2,886
869
869
869
3,275
3,275
3,275
1,224
1,224
1,224
8,254
8,254
8,254
$
$
$
$
$
$
Mapping services
Mapping services
Mapping services
Professional services
Professional services
Professional services
Data licenses
Data licenses
Data licenses
3DBI software applications
3DBI software applications
3DBI software applications
11. Operating and financing costs:
11. Operating and financing costs:
11. Operating and financing costs:
11. Operating and financing costs:
(a) Operating costs:
(a) Operating costs:
a. Operating costs:
For the twelve months ended December 31,
For the twelve months ended December 31,
For the twelve months ended December 31,
(a) Operating costs:
Personnel
Personnel
INTERMAP TECHNOLOGIES CORPORATION
Purchased services & materials(1)
Purchased services & materials(1)
Travel
Notes to Consolidated Financial Statements
Travel
Facilities and other expenses
(In thousands of United States dollars, except per share information)
Facilities and other expenses
Personnel
Purchased services & materials(1)
Travel
Facilities and other expenses
$
$
$
Years ended December 31, 2015 and 2014
$
$
$
Page 29
(1) Purchased services and materials include aircraft costs, project costs, professional and
(1) Purchased services and materials include aircraft costs, project costs, professional and
(1) Purchased services and materials include aircraft costs, project costs, professional and
(1) Purchased services and materials include aircraft costs, project costs, professional and consulting fees, and selling and
consulting fees, and selling and marketing costs.
marketing costs.
consulting fees, and selling and marketing costs.
consulting fees, and selling and marketing costs.
$
$
$
2015
2015
2015
2014
2014
2014
10,998
10,998
10,998
3,565
3,565
3,565
530
530
530
1,767
1,767
1,767
16,860
16,860
16,860
$
$
$
12,096
12,096
12,096
5,532
5,532
5,532
1,025
1,025
1,025
2,065
2,065
2,065
20,718
20,718
20,718
b. Financing costs:
(b) Financing costs:
For the twelve months ended December 31,
2015
2014
Interest on notes payable
Accretion of discounts recognized on notes payable
Royalty associated with note payable
Interest on project financing
Interest on finance lease
12. Share capital:
(a) Authorized:
$
$
2,668
2,751
1,129
94
19
6,661
$
1,228
650
-
99
29
2,006
$
The authorized share capital of the Company consists of an unlimited number of Class A common
shares and an unlimited number of Class A participating preferred shares. There are no Class A
participating preferred shares outstanding.
(b) Issued:
Class A common shares
Shares
Amount
Shares
Amount
December 31, 2015
Number of
December 31, 2014
Number of
Balance, beginning of period:
Unrestricted shares
Restricted shares held in escrow
Issuance of common shares from
conversion of convertible note
Conversion option of convertible note
Issuance of warrants
Warrant exercise
Option exercise
Share-based compensation
Restricted shares released from
escrow and cancelled
Balance, end of period:
91,782,665
$
194,377
91,613,401
$
194,337
-
526,098
5,741,187
2,508,020
116,250
89,250
-
-
-
-
540
16
385
1,004
57
30
-
-
-
-
-
-
-
-
-
-
-
-
-
100,237,372
$
196,409
91,782,665
$
194,377
169,264
40
(526,098)
On September 15, 2015, 108,750 Class A common shares were issued upon the exercise of options
with a grant date fair value of $21 for cash proceeds of $33.
On August 28, 2015, 7,500 Class A common shares were issued upon the exercise of options with a
grant date fair value of $1 for cash proceeds of $2.
2015 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, 2015 and 2014
Page 29
(b) Financing costs:
For the twelve months ended December 31,
2015
2014
Interest on notes payable
Accretion of discounts recognized on notes payable
Royalty associated with note payable
Interest on project financing
Interest on finance lease
12. Share capital:
12. Share capital:
(a) Authorized:
a. Authorized:
$
$
2,668
2,751
1,129
94
19
6,661
$
1,228
650
-
99
29
2,006
$
47
The authorized share capital of the Company consists of an unlimited number of Class A common
The authorized share capital of the Company consists of an unlimited number of Class A common
shares and an unlimited number of Class A participating preferred shares. There are no Class A
shares and an unlimited number of Class A participating preferred shares. There are no Class A
participating preferred shares outstanding.
participating preferred shares outstanding.
b.
(b) Issued:
Issued:
Class A common shares
Shares
Amount
Shares
Amount
December 31, 2015
Number of
December 31, 2014
Number of
Balance, beginning of period:
Unrestricted shares
Restricted shares held in escrow
Issuance of common shares from
conversion of convertible note
Conversion option of convertible note
Issuance of warrants
Warrant exercise
Option exercise
Share-based compensation
Restricted shares released from
escrow and cancelled
Balance, end of period:
91,782,665
-
$
194,377
-
91,613,401
526,098
$
194,337
-
5,741,187
-
-
2,508,020
116,250
89,250
540
16
385
1,004
57
30
-
-
-
-
-
169,264
-
-
-
-
-
40
-
100,237,372
-
196,409
$
(526,098)
91,782,665
-
194,377
$
On September 15, 2015, 108,750 Class A common shares were issued upon the exercise of options
On September 15, 2015, 108,750 Class A common shares were issued upon the exercise of options with
with a grant date fair value of $21 for cash proceeds of $33.
a grant date fair value of $21 for cash proceeds of $33.
On August 28, 2015, 7,500 Class A common shares were issued upon the exercise of options with a
On August 28, 2015, 7,500 Class A common shares were issued upon the exercise of options with a
grant date fair value of $1 for cash proceeds of $2.
grant date fair value of $1 for cash proceeds of $2.
On August 20, 2015, 958,020 Class A common shares were issued upon the exercise of warrants for
cash proceeds of $59. The value attributed to the warrant liability of $439 was transferred to share
capital upon exercise.
On July 2, 2015, 89,250 Class A common shares were issued to directors of the Company as
compensation for services. Compensation expense of $30 for these Class A common shares is included
in operating costs (see Note 13(e)).
On June 29, 2015, 1,550,000 Class A common shares were issued upon the exercise of warrants for cash
proceeds of $97. The value attributed to the warrant liability of $409 was transferred to share capital
upon exercise.
On June 12, 2015, 5,741,187 Class A common shares were issued upon conversion of a convertible
promissory note issued on December 12, 2014. The value attributed to the conversion was $556
and includes the accrued interest of $40, which was forgiven upon conversion, and $16 for the
proportionate share of the conversion option of the convertible note originally classified in contributed
surplus (see Note 12(c)).
On April 1, 2015, the Company issued 9,178,266 warrants to purchase Class A common shares of the
Company in connection with a promissory note (see Note 7(e)) with a value of $271 allocated to share
capital.
On May 1, 2015, the Company issued 4,530,166 warrants to purchase Class A common shares of the
Company in connection with a promissory note (see Note 7(c)) with a value of $114 allocated to share
capital.
2015 Annual Report | Consolidated Financial Statements
48
On June 11, 2014, 169,264 Class A common shares were issued to directors of the Company as
compensation for services. Compensation expense of $40 for these Class A common shares is included
in operating costs (see Note 12(e)).
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.
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2015 and 2014
c. Contributed surplus:
Balance, beginning of period
Share-based compensation
Exercise of options
Conversion option of convertible note (Note 7(a))
Issuance costs of convertible note
Deferred tax effect of convertible note
Balance, end of period
Page 31
December 31,
2015
December 31,
2014
$
11,395
294
(22)
(16)
-
(73)
$
10,671
408
-
704
(5)
(383)
$
11,578
$
11,395
d. Earnings (loss) per share:
(d) Earnings (loss) per share:
The calculation of earnings (loss) per share is based on the weighted average number of Class A
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,
common shares outstanding. Where the impact of the exercise of options or warrants is anti-
they are not included in the calculation of diluted loss per share. The Company has incurred a net loss
dilutive, they are not included in the calculation of diluted loss per share. The Company has
for each period presented and the inclusion of the outstanding options and warrants in the loss per
share calculation are considered to be anti-dilutive and are therefore not included in the calculation.
incurred a net loss for each period presented and the inclusion of the outstanding options and
warrants in the loss per share calculation are considered to be anti-dilutive and are therefore not
The underlying Class A common shares pertaining to 6,864,850 outstanding share options and
included in the calculation.
24,713,130 outstanding warrants could potentially dilute earnings.
The underlying Class A common shares pertaining to 6,864,850 outstanding share options and
e. Director’s share compensation plan:
24,713,130 outstanding warrants could potentially dilute earnings.
The Company has a director’s share compensation plan which originally allowed for the issuance
(e) Director’s share compensation plan:
of up to 400,000 shares of the Company’s Class A common shares to non-employee directors of the
Company as part of their annual compensation and was amended in 2011 to 1,400,000 shares. At the
The Company has a director’s share compensation plan which originally allowed for the issuance of
Annual General and Special Meeting of the Shareholders on August 9, 2012, an amendment to the
up to 400,000 shares of the Company’s Class A common shares to non-employee directors of the
share compensation plan was approved to increase the maximum number of Class A common shares
Company as part of their annual compensation and was amended in 2011 to 1,400,000 shares. At
of the Corporation issuable thereunder from 1,400,000 to 2,400,000. As of December 31, 2015, 637,889
the Annual General and Special Meeting of the Shareholders on August 9, 2012, an amendment to
Class A common shares remain available under the plan. Compensation expense for issued shares is
included in operating costs.
the share compensation plan was approved to increase the maximum number of Class A common
f.
shares of the Corporation issuable thereunder from 1,400,000 to 2,400,000. As of December 31,
Employee share compensation plan:
2015, 637,889 Class A common shares remain available under the plan. Compensation expense for
The Company established an employee share compensation plan to compensate employees for
issued shares is included in operating costs.
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
(f) Employee share compensation plan:
Company’s Class A common shares to employees. At the Annual General and Special Meeting of the
The Company established an employee share compensation plan to compensate employees for
Shareholders on August 3, 2011, an amendment to the share compensation plan was approved to
services performed. The plan was approved by the shareholders of the Company at the Annual
increase the maximum number of Class A common shares of the Corporation issuable thereunder from
General Meeting on May 12, 2009. The plan originally allowed for the issuance of up to 1,500,000
1,500,000 to 4,000,000. At the Annual General and Special Meeting of the Shareholders on August 14,
2014, an amendment to the share compensation plan was approved to increase the maximum number
shares of the Company’s Class A common shares to employees. At the Annual General and Special
of Class A common shares of the Corporation issuable thereunder from 4,000,000 to 8,000,000. As of
Meeting of the Shareholders on August 3, 2011, an amendment to the share compensation plan was
December 31, 2015, 6,794,812 Class A common shares remain available for issuance under the plan.
Compensation expense for issued shares is included in operating costs.
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2015 and 2014
Page 33
Options outstanding,
beginning of period
Granted
Exercised
Expired
Forfeitures
December 31, 2015
December 31, 2014
Number of
shares
Weighted
average
exercise
Number of
shares
Weighted
average
exercise
under option
price (CDN)
under option
price (CDN)
7,427,400
$
0.46
6,287,320
$
0.55
-
(116,250)
(390,050)
(56,250)
-
0.40
1.40
0.26
1,839,630
-
(462,550)
(237,000)
0.28
-
1.04
0.33
Options outstanding, end of period
6,864,850
$
0.46
7,427,400
$
0.46
Options exercisable, end of period
5,006,100
$
0.44
4,398,592
$
0.53
Exercise
Price
(CDN$)
0.17
0.25
0.27
0.29
0.33
0.38
0.43
0.44
0.46
0.48
0.50
0.66
1.60
Options
outstanding
25,000
134,630
20,000
1,478,750
700,000
40,000
1,012,240
1,535,000
753,230
450,000
450,000
225,000
41,000
6,864,850
Weighted average
remaining
contractual life
Options
exercisable
6,250
4.62 years
3.12 years
2.36 years
4.02 years
2.66 years
3.37 years
1.25 years
2.50 years
1.96 years
1.01 years
0.93 years
1.11 years
0.18 years
1.96 years
1,012,240
134,630
15,000
368,750
600,000
20,000
930,000
753,230
450,000
450,000
225,000
41,000
5,006,100
During the twelve months ended December 31, 2015, no options were granted. The estimated
forfeiture rate was 5.43%. During the twelve months ended December 31, 2015, the Company
recognized $211 (twelve months ended December 31, 2014 - $416) of non-cash compensation
expense related to the share option 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-based payments plan, based on the average stock price of the Company during the last quarter
of the year ended December 31, 2015, and includes the award of up to 2,398,000 common shares to
be issued as equity-settled share-based compensation and up to 3,597,000 common shares to be
settled in either cash or common shares, at the discretion of the Board of Directors. Any awards
settled in cash will be determined by multiplying the number of shares earned under the optional
settlement portion by the Company’s closing stock price on December 31, 2015 and paid 50% of the
earned award on March 31, 2016 and 50% of the earned award on March 31, 2017, subject to
2015 Annual Report | Consolidated Financial Statements
49
g. Share option plan:
The Company established a share option plan to provide long-term incentives to attract, motivate, and
retain certain key employees, officers, directors, and consultants providing services to the Company.
The plan permits the granting of options to purchase up to 10% of the outstanding Class A common
shares of the Company. As of December 31, 2015, 10,023,737 Class A common shares were authorized
under the plan, of which 6,864,850 share options are issued and outstanding and 3,158,887 options
remain available for future issuance. Under the plan, no one individual shall be granted an option
resulting in cumulative grants in excess of 5% of the issued and outstanding Class A common shares
of the Company. In addition, the exercise price of each option shall not be less than the market price
of the Company’s Class A common shares on the date of grant. The options are exercisable for a period
of not greater than six years, and generally vest over a period of one to four years. Options granted to
directors generally vest on the date of the grant and expire on the fifth anniversary of the date of such
grant.
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2015 and 2014
The following table summarizes information regarding share options outstanding:
Page 33
December 31, 2015
December 31, 2014
Number of
shares
under option
Weighted
average
exercise
price (CDN)
Number of
shares
under option
Weighted
average
exercise
price (CDN)
Options outstanding,
beginning of period
Granted
Exercised
Expired
Forfeitures
Options outstanding, end of period
7,427,400
-
(116,250)
(390,050)
(56,250)
6,864,850
$
$
0.46
-
0.40
1.40
0.26
0.46
6,287,320
1,839,630
-
(462,550)
(237,000)
7,427,400
0.55
0.28
-
1.04
0.33
0.46
$
$
Options exercisable, end of period
5,006,100
$
0.44
4,398,592
$
0.53
Exercise
Price
(CDN$)
0.17
0.25
0.27
0.29
0.33
0.38
0.43
0.44
0.46
0.48
0.50
0.66
1.60
Options
outstanding
25,000
134,630
20,000
1,478,750
700,000
40,000
1,012,240
1,535,000
753,230
450,000
450,000
225,000
41,000
6,864,850
Weighted average
remaining
contractual life
4.62 years
3.12 years
2.36 years
4.02 years
2.66 years
3.37 years
1.25 years
2.50 years
1.96 years
1.01 years
0.93 years
1.11 years
0.18 years
1.96 years
Options
exercisable
6,250
134,630
15,000
368,750
600,000
20,000
1,012,240
930,000
753,230
450,000
450,000
225,000
41,000
5,006,100
During the twelve months ended December 31, 2015, no options were granted. The estimated
During the twelve months ended December 31, 2015, no options were granted. The estimated
forfeiture rate was 5.43%. During the twelve months ended December 31, 2015, the Company
forfeiture rate was 5.43%. During the twelve months ended December 31, 2015, the Company
recognized $211 (twelve months ended December 31, 2014 - $416) of non-cash compensation
recognized $211 (twelve months ended December 31, 2014 - $416) of non-cash compensation
expense related to the share option plan.
expense related to the share option plan.
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
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-
plan (LTIP) intended to retain and compensate senior management of the Company. The LTIP is a
based payments plan, based on the average stock price of the Company during the last quarter of
share-based payments plan, based on the average stock price of the Company during the last quarter
the year ended December 31, 2015, and includes the award of up to 2,398,000 common shares to be
of the year ended December 31, 2015, and includes the award of up to 2,398,000 common shares to
issued as equity-settled share-based compensation and up to 3,597,000 common shares to be settled
be issued as equity-settled share-based compensation and up to 3,597,000 common shares to be
in either cash or common shares, at the discretion of the Board of Directors. Any awards settled in cash
settled in either cash or common shares, at the discretion of the Board of Directors. Any awards
settled in cash will be determined by multiplying the number of shares earned under the optional
settlement portion by the Company’s closing stock price on December 31, 2015 and paid 50% of the
earned award on March 31, 2016 and 50% of the earned award on March 31, 2017, subject to
2015 Annual Report | Consolidated Financial Statements
50
will be determined by multiplying the number of shares earned under the optional settlement portion
by the Company’s closing stock price on December 31, 2015 and paid 50% of the earned award on
March 31, 2016 and 50% of the earned award on March 31, 2017, subject to predetermined working
capital thresholds. To receive the awards, the eligible employees must be employed by the Company
on the scheduled payment dates. At December 31, 2015 1,058,165 shares were earned under the
equity-settled portion of the LTIP and 1,587,248 shares were earned under the optional settlement
portion of the LTIP.
The fair value of the awards is subject to estimation uncertainty and was calculated using a Monte
Carlo simulation model with the following assumptions at the grant date: expected dividend yield 0%,
risk-free interest rate of 1.02%, volatility of 94.35%, grant date of August 8, 2014 and 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 twelve months ending December 31, 2015, $82 has been
charged to non-cash compensation expense and as of December 31, 2015, $113 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 predetermined working capital
thresholds, and was determined using a discount rate of 8.97%. The fair value of the amount estimated
to be payable to employees under the optional settlement portion of the LTIP is charged to non-cash
compensation expense with a corresponding increase in liabilities, over the service period, and is re-
measured to the current fair value at each reporting date.
The fair value of the awards is subject to estimation uncertainty and at December 31, 2015 a liability
of $250 has been recorded representing the vested portion of the fair value of the optional settlement
portion of the LTIP.
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Any changes in the liability are recognized in profit or loss over the service period. For the twelve
months ended December 31, 2015, $244 has been charged to non-cash compensation expense and
as of December 31, 2015, $158 is included in other short-term liabilities and $92 is included in other
long-term liabilities.
Years ended December 31, 2015 and 2014
Page 35
i.
(i)
Share-based compensation expense:
Share-based compensation expense:
Non-cash compensation expense has been included in operating costs with respect to the LTIP, share
Non-cash compensation expense has been included in operating costs with respect to the LTIP, share
options, and shares granted to employees and non-employees as follows:
options, and shares granted to employees and non-employees as follows:
For the twelve months ended December 31,
Employees
Non-employees
Non-cash compensation
2015
2014
$
538
100
$
389
65
$
638
$
454
13. 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.
Number of
Warrants
Exercised Outstanding
19,050,000
Grant Date Expiry Date
Exercise
Price
Granted
Expired
December 31, 2013
2/7/2014
4/28/2011
4/28/2011
12/12/2014
12/26/2014
2/7/2017 C$ 0.56
4/28/2014 C$ 0.40
4/28/2014 C$ 0.48
12/12/2017 C$ 0.10
12/26/2017 C$ 0.07
3,091,572
- (1,225,000)
- (16,125,000)
- - 3,091,572
- (1,225,000)
- (16,125,000)
- - 1,137,202
1,137,202
December 31, 2014
5,895,441
(17,350,000)
-
7,595,441
1,666,667
- - 1,666,667
1/6/2015
1/14/2015
4/1/2015
5/1/2015
6/26/2012
2/6/2017 C$ 0.08
1/21/2018 C$ 0.08
4/3/2018 US$ 0.07
5/1/2018 US$ 0.06
6/26/2015 C$ 0.08
4,597,443
- (958,020) 3,639,423
1,469,834
- - 1,469,834
9,178,266
- - 9,178,266
4,530,166
- - 4,530,166
- (150,000) (1,550,000) (1,700,000)
December 31, 2015
19,775,709
(150,000)
(2,508,020)
24,713,130
Each warrant entitles its holder to purchase one Class A common share. Vertex, the holder of all of
the Company’s convertible and other notes payable with the exception of the January 14, 2015 note,
holds 18,713,130 of the warrants outstanding at December 31, 2015. The 11,004,698 warrants
denominated in Canadian dollars, a currency different from the Company’s functional currency,
are recognized as a financial liability at fair value through profit and loss. The 13,708,432 warrants
denominated in United States dollars are recognized as part of share capital. At December 31, 2015
$385 is included in share capital related to these warrants (December 31, 2014 – nil).
The following table details the number and value of the non-broker Class A common share
purchase warrants denominated in Canadian dollars that are outstanding and included in warrant
liability at each balance sheet date.
2015 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, 2015 and 2014
Page 35
(i)
Share-based compensation expense:
Non-cash compensation expense has been included in operating costs with respect to the LTIP, share
options, and shares granted to employees and non-employees as follows:
For the twelve months ended December 31,
Employees
Non-employees
Non-cash compensation
2015
2014
$
538
100
$
389
65
$
638
$
454
51
13. Class A common share purchase warrants:
13. Class A common share purchase warrants:
The following table details the number of Class A common share purchase warrants outstanding at
The following table details the number of Class A common share purchase warrants outstanding at each
each balance sheet date.
balance sheet date.
Number of
Warrants
Exercised Outstanding
19,050,000
Grant Date Expiry Date
Exercise
Price
Granted
Expired
December 31, 2013
2/7/2014
4/28/2011
4/28/2011
12/12/2014
12/26/2014
2/7/2017 C$ 0.08
4/28/2014 C$ 0.40
4/28/2014 C$ 0.48
12/12/2017 C$ 0.10
12/26/2017 C$ 0.07
3,091,572
- (1,225,000)
- (16,125,000)
- - 3,091,572
- (1,225,000)
- (16,125,000)
- - 1,137,202
- - 1,666,667
1,137,202
1,666,667
December 31, 2014
5,895,441
(17,350,000)
-
7,595,441
1/6/2015
1/14/2015
4/1/2015
5/1/2015
6/26/2012
2/6/2017 C$ 0.08
1/21/2018 C$ 0.08
4/3/2018 US$ 0.07
5/1/2018 US$ 0.06
6/26/2015 C$ 0.08
4,597,443
1,469,834
9,178,266
4,530,166
- (958,020) 3,639,423
- - 1,469,834
- - 9,178,266
- - 4,530,166
- (150,000) (1,550,000) (1,700,000)
December 31, 2015
19,775,709
(150,000)
(2,508,020)
24,713,130
Each warrant entitles its holder to purchase one Class A common share. Vertex, the holder of all of the
Each warrant entitles its holder to purchase one Class A common share. Vertex, the holder of all of
Company’s convertible and other notes payable with the exception of the January 14, 2015 note, holds
the Company’s convertible and other notes payable with the exception of the January 14, 2015 note,
18,713,130 of the warrants outstanding at December 31, 2015. The 11,004,698 warrants denominated in
holds 18,713,130 of the warrants outstanding at December 31, 2015. The 11,004,698 warrants
Canadian dollars, a currency different from the Company’s functional currency, are recognized as a financial
denominated in Canadian dollars, a currency different from the Company’s functional currency,
liability at fair value through profit and loss. The 13,708,432 warrants denominated in United States dollars
are recognized as part of share capital. At December 31, 2015 $385 is included in share capital related to
are recognized as a financial liability at fair value through profit and loss. The 13,708,432 warrants
INTERMAP TECHNOLOGIES CORPORATION
these warrants (December 31, 2014 – $Nil).
denominated in United States dollars are recognized as part of share capital. At December 31, 2015
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
The following table details the number and value of the non-broker Class A common share purchase
$385 is included in share capital related to these warrants (December 31, 2014 – nil).
warrants denominated in Canadian dollars that are outstanding and included in warrant liability at each
The following table details the number and value of the non-broker Class A common share
balance sheet date.
purchase warrants denominated in Canadian dollars that are outstanding and included in warrant
Years ended December 31, 2015 and 2014
Page 36
Number of
non-broker warrants
Warrant
liability
liability at each balance sheet date.
Balance at December 31, 2014
Issued
Expired
Exercised
Revaluation
Balance at December 31, 2015
7,595,441
$
226
6,067,277
(150,000)
(2,508,020)
-
162
(40)
(835)
2,572
11,004,698
$
2,085
On January 6, 2015, the Company issued warrants to purchase up to 4,597,443 common shares of the
On January 6, 2015, the Company issued warrants to purchase up to 4,597,443 common shares of
Company to certain holders of previously-issued promissory notes and warrants. The warrant issuance was
the Company to certain holders of previously-issued promissory notes and warrants. The warrant
in consideration for the release by the note holders of a first priority lien in certain of the Company’s secured
issuance was in consideration for the release by the note holders of a first priority lien in certain of
assets and the sharing of security on the remainder of the Company’s assets, on a pro-rata basis, with a new
lender under a debt financing completed December 26, 2014 (Note 7(c)). The new warrants are exercisable
the Company’s secured assets and the sharing of security on the remainder of the Company’s assets,
into common shares at C$0.08 per share until February 6, 2017.
on a pro-rata basis, with a new lender under a debt financing completed December 26, 2014 (Note
On January 15, 2015, the Company amended the exercise price to C$0.08 per share for outstanding
7(c)). The new warrants are exercisable into common shares at C$0.08 per share until February 6,
warrants to purchase 4,791,572 common shares of the Company. The original number of underlying shares
2017.
and exercise price of these warrants was (i) 3,091,572 common 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
On January 15, 2015, the Company amended the exercise price to C$0.08 per share for outstanding
price, the original terms of these warrants remain unchanged. The amendment to the warrant exercise
warrants to purchase 4,791,572 common shares of the Company. The original number of
underlying shares and exercise price of these warrants was (i) 3,091,572 common 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 warrants remain
unchanged. The amendment to the warrant exercise 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 (Note 7(c)).
On December 31, 2015, the 5,895,441 non-broker warrants issued in 2014 were re-valued to $1,117
using the Black-Scholes option pricing model with the following assumptions: exercise price of
C$0.07-C$0.10; average volatility rate of 94.5%-116.7%; risk-free interest rate of 0.62%; expected life
of 14-24 months; and an exchange rate of 0.7225.
In determining the fair value of the 1,469,834 non-broker warrants issued on January 14, 2015, the
Company used the Black-Scholes option pricing model with the following assumptions: exercise
price of C$0.08; average volatility rate of 58.6%; risk-free interest rate of 1.00%; expected life of three
years; and an exchange rate of 0.787. The value of $29 was established on January 14, 2015 and
subsequently revalued to $281 on December 31, 2015 utilizing the Black-Scholes option pricing
model with the following assumptions: exercise price of C$0.08; average volatility rate of 93.6%;
risk-free interest rate of 0.62%; expected life of 26 months; and an exchange rate of 0.7225.
2015 Annual Report | Consolidated Financial Statements
52
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
(Note 7(c)).
On December 31, 2015, the 5,895,441 non-broker warrants issued in 2014 were re-valued to $1,117 using
the Black-Scholes option pricing model with the following assumptions: exercise price of C$0.07-C$0.10;
average volatility rate of 94.5%-116.7%; risk-free interest rate of 0.62%; expected life of 14-24 months; and
an exchange rate of 0.7225.
INTERMAP TECHNOLOGIES CORPORATION
INTERMAP TECHNOLOGIES CORPORATION
In determining the fair value of the 1,469,834 non-broker warrants issued on January 14, 2015, the Company
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
used the Black-Scholes option pricing model with the following assumptions: exercise price of C$0.08;
(In thousands of United States dollars, except per share information)
(In thousands of United States dollars, except per share information)
average volatility rate of 58.6%; risk-free interest rate of 1.00%; expected life of three years; and an exchange
Page 37
Years ended December 31, 2015 and 2014
rate of 0.787. The value of $29 was established on January 14, 2015 and subsequently revalued to $281
Page 37
Years ended December 31, 2015 and 2014
on December 31, 2015 utilizing the Black-Scholes option pricing model with the following assumptions:
In determining the fair value of the 4,597,443 non-broker warrants issued on January 6, 2015, the
In determining the fair value of the 4,597,443 non-broker warrants issued on January 6, 2015, the
exercise price of C$0.08; average volatility rate of 93.6%; risk-free interest rate of 0.62%; expected life of 26
Company used the Black-Scholes option pricing model with the following assumptions: exercise
Company used the Black-Scholes option pricing model with the following assumptions: exercise
months; and an exchange rate of 0.7225.
price of C$0.08; average volatility rate of 108.0%; risk-free interest rate of 1.00%; expected life of two
price of C$0.08; average volatility rate of 108.0%; risk-free interest rate of 1.00%; expected life of two
In determining the fair value of the 4,597,443 non-broker warrants issued on January 6, 2015, the
years; and an exchange rate of 0.8472. The value of $133 was established on January 6, 2015. On
years; and an exchange rate of 0.8472. The value of $133 was established on January 6, 2015. On
Company used the Black-Scholes option pricing model with the following assumptions: exercise price of
August 20, 2015, 958,020 of these warrants were exercised, leaving 3,639,423 warrants outstanding
August 20, 2015, 958,020 of these warrants were exercised, leaving 3,639,423 warrants outstanding
C$0.08; average volatility rate of 108.0%; risk-free interest rate of 1.00%; expected life of two years; and
at December 31, 2015. The warrants were revalued to $687 on December 31, 2015 utilizing the
at December 31, 2015. The warrants were revalued to $687 on December 31, 2015 utilizing the
an exchange rate of 0.8472. The value of $133 was established on January 6, 2015. On August 20, 2015,
Black-Scholes option pricing model with the following assumptions: exercise price of C$0.08;
Black-Scholes option pricing model with the following assumptions: exercise price of C$0.08;
958,020 of these warrants were exercised, leaving 3,639,423 warrants outstanding at December 31, 2015.
average volatility rate of 116.7%; risk-free interest rate of 0.62%; expected life of 14 months; and an
The warrants were revalued to $687 on December 31, 2015 utilizing the Black-Scholes option pricing model
average volatility rate of 116.7%; risk-free interest rate of 0.62%; expected life of 14 months; and an
exchange rate of 0.7225.
with the following assumptions: exercise price of C$0.08; average volatility rate of 116.7%; risk-free interest
exchange rate of 0.7225.
rate of 0.62%; expected life of 14 months; and an exchange rate of 0.7225.
The Company also issued 9,178,266 non-broker warrants on April 1, 2015 and 4,530,166 non-
The Company also issued 9,178,266 non-broker warrants on April 1, 2015 and 4,530,166 non-
broker warrants on May 1, 2015. As the exercise price for both of these issuances is denominated in
broker warrants on May 1, 2015. As the exercise price for both of these issuances is denominated in
U.S. dollars, the Company’s functional currency, the warrants are not considered a derivative
U.S. dollars, the Company’s functional currency, the warrants are not considered a derivative
liability and are not required to be recorded as a liability and revalued quarterly.
liability and are not required to be recorded as a liability and revalued quarterly.
The Company also issued 9,178,266 non-broker warrants on April 1, 2015 and 4,530,166 non-broker
warrants on May 1, 2015. As the exercise price for both of these issuances is denominated in U.S. dollars,
the Company’s functional currency, the warrants are not considered a derivative liability and are not
required to be recorded as a liability and revalued quarterly.
14. Income taxes:
14. Income taxes:
14. Income taxes:
(a) Current tax (expense) recovery:
(a) Current tax (expense) recovery:
a. Current tax (expense) recovery:
December 31
December 31
Current period
Current period
Adjustment for prior periods
Adjustment for prior periods
(b) Deferred tax recovery:
b. Deferred tax recovery:
(b) Deferred tax recovery:
2015
2015
(25)
(25)
(2)
(2)
(27)
(27)
2014
2014
$
-
-
$
-
-
$
-
$
-
$
$
$
$
December 31
December 31
Origination and reversal of temporary differences
Origination and reversal of temporary differences
2015
2015
73
73
$
$
2014
2014
383
383
$
$
During 2015, the Company recognized $73 (2014 - $383) in deferred tax expense related to the
During 2015, the Company recognized $73 (2014 - $383) in deferred tax expense related to the
During 2015, the Company recognized $73 (2014 - $383) in deferred tax expense related to the
convertible and other notes payable directly in equity.
convertible and other notes payable directly in equity.
convertible and other notes payable directly in equity.
(c) Reconciliation of effective tax rate:
(c) Reconciliation of effective tax rate:
Income tax expense varies from the amount that would be computed by applying the basic federal
Income tax expense varies from the amount that would be computed by applying the basic federal
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:
2015 Annual Report | Consolidated Financial Statements
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, 2015 and 2014
Years ended December 31, 2015 and 2014
Page 37
Page 37
In determining the fair value of the 4,597,443 non-broker warrants issued on January 6, 2015, the
In determining the fair value of the 4,597,443 non-broker warrants issued on January 6, 2015, the
Company used the Black-Scholes option pricing model with the following assumptions: exercise
Company used the Black-Scholes option pricing model with the following assumptions: exercise
price of C$0.08; average volatility rate of 108.0%; risk-free interest rate of 1.00%; expected life of two
price of C$0.08; average volatility rate of 108.0%; risk-free interest rate of 1.00%; expected life of two
years; and an exchange rate of 0.8472. The value of $133 was established on January 6, 2015. On
years; and an exchange rate of 0.8472. The value of $133 was established on January 6, 2015. On
August 20, 2015, 958,020 of these warrants were exercised, leaving 3,639,423 warrants outstanding
August 20, 2015, 958,020 of these warrants were exercised, leaving 3,639,423 warrants outstanding
at December 31, 2015. The warrants were revalued to $687 on December 31, 2015 utilizing the
at December 31, 2015. The warrants were revalued to $687 on December 31, 2015 utilizing the
Black-Scholes option pricing model with the following assumptions: exercise price of C$0.08;
Black-Scholes option pricing model with the following assumptions: exercise price of C$0.08;
average volatility rate of 116.7%; risk-free interest rate of 0.62%; expected life of 14 months; and an
average volatility rate of 116.7%; risk-free interest rate of 0.62%; expected life of 14 months; and an
exchange rate of 0.7225.
exchange rate of 0.7225.
The Company also issued 9,178,266 non-broker warrants on April 1, 2015 and 4,530,166 non-
The Company also issued 9,178,266 non-broker warrants on April 1, 2015 and 4,530,166 non-
broker warrants on May 1, 2015. As the exercise price for both of these issuances is denominated in
broker warrants on May 1, 2015. As the exercise price for both of these issuances is denominated in
U.S. dollars, the Company’s functional currency, the warrants are not considered a derivative
U.S. dollars, the Company’s functional currency, the warrants are not considered a derivative
liability and are not required to be recorded as a liability and revalued quarterly.
liability and are not required to be recorded as a liability and revalued quarterly.
14. Income taxes:
14. Income taxes:
(a) Current tax (expense) recovery:
(a) Current tax (expense) recovery:
December 31
December 31
Current period
Current period
Adjustment for prior periods
Adjustment for prior periods
(b) Deferred tax recovery:
(b) Deferred tax recovery:
December 31
December 31
Origination and reversal of temporary differences
Origination and reversal of temporary differences
2015
2015
(2)
(2)
$
$
(25)
(25)
$
$
-
-
$
$
(27)
(27)
$
$
-
-
2014
2014
-
-
2015
2015
2014
2014
$
$
73
73
$
$
383
383
During 2015, the Company recognized $73 (2014 - $383) in deferred tax expense related to the
During 2015, the Company recognized $73 (2014 - $383) in deferred tax expense related to the
convertible and other notes payable directly in equity.
convertible and other notes payable directly in equity.
(c) Reconciliation of effective tax rate:
(c) Reconciliation of effective tax rate:
Income tax expense varies from the amount that would be computed by applying the basic federal
Income tax expense varies from the amount that would be computed by applying the basic federal
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:
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)
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
Years ended December 31, 2015 and 2014
c. Reconciliation of effective tax rate:
Years ended December 31, 2015 and 2014
(In thousands of United States dollars, except per share information)
Page 38
Page 38
53
Years ended December 31, 2015 and 2014
December 31,
Income tax expense varies from the amount that would be computed by applying the basic federal
December 31,
and provincial income tax rates to the net loss before taxes as follows:
Losses, excluding income tax
Losses, excluding income tax
Tax rate
December 31,
Tax rate
Expected Canadian income tax recovery
Losses, excluding income tax
Expected Canadian income tax recovery
Decrease resulting from:
Tax rate
Decrease resulting from:
2015
2015
(18,200)
(18,200)
26.0%
2015
26.0%
4,732
(18,200)
4,732
2014
2014
(12,420)
(12,420)
25.0%
2014
25.0%
3,105
(12,420)
3,105
Page 38
$
$
$
$
$
$
$
$
$
$
Decrease resulting from:
Expected Canadian income tax recovery
Change in unrecognized temporary differences
Change in unrecognized temporary differences
Change in Canadian statutory rate
Change in Canadian statutory rate
Difference between Canadian statutory rate and those
Difference between Canadian statutory rate and those
applicable to U.S. and other foreign subsidiaries
Change in unrecognized temporary differences
applicable to U.S. and other foreign subsidiaries
Non-deductible expenses and non-taxable income
Change in Canadian statutory rate
Non-deductible expenses and non-taxable income
Other
Difference between Canadian statutory rate and those
Other
applicable to U.S. and other foreign subsidiaries
Non-deductible expenses and non-taxable income
Other
(d) Recognized deferred tax assets and liabilities:
(d) Recognized deferred tax assets and liabilities:
d. Recognized deferred tax assets and liabilities:
$
$
26.0%
(5,549)
(5,549)
4,732
1,465
1,465
1,176
(5,549)
1,176
(1,809)
1,465
(1,809)
31
31
46
1,176
46
(1,809)
31
46
25.0%
(4,417)
(4,417)
3,105
-
-
1,595
(4,417)
1,595
185
-
185
(85)
(85)
383
1,595
383
185
(85)
383
$
$
$
$
$
$
(d) Recognized deferred tax assets and liabilities:
Deferred income taxes reflect the impact of temporary differences between amounts of assets and
Deferred income taxes reflect the impact of temporary differences between amounts of assets and
Deferred income taxes reflect the impact of temporary differences between amounts of assets and
liabilities for financial reporting purposes and such amounts as measured by tax laws. Deferred tax
liabilities for financial reporting purposes and such amounts as measured by tax laws. Deferred tax
liabilities for financial reporting purposes and such amounts as measured by tax laws. Deferred tax
Deferred income taxes reflect the impact of temporary differences between amounts of assets and
assets and liabilities recognized at December 31, 2015 and 2014, are as follows:
assets and liabilities recognized at December 31, 2015 and 2014, are as follows:
assets and liabilities recognized at December 31, 2015 and 2014, are as follows:
liabilities for financial reporting purposes and such amounts as measured by tax laws. Deferred tax
Assets
Assets
Liabilities
Liabilities
assets and liabilities recognized at December 31, 2015 and 2014, are as follows:
December 31,
December 31,
2014
2014
2014
2014
2015
2015
2015
2015
2015
2015
2014
2014
Property and equipment
Property and equipment
Convertible note
December 31,
Convertible note
Tax loss carryforwards
Tax loss carryforwards
Property and equipment
Tax (assets) liabilities
Tax (assets) liabilities
Convertible note
Set off of tax
Tax loss carryforwards
Set off of tax
Net tax (assets) liabilities
Net tax (assets) liabilities
Tax (assets) liabilities
Assets
$
-
$
-
2015
(191)
(191)
$
-
$
(191)
(191)
$
191
(191)
191
$
-
$
-
$
(191)
$
-
-
$
-
2014
-
(341)
(341)
$
-
$
(341)
$
(341)
-
341
(341)
341
$
-
$
-
$
(341)
$
$
$
148
191
191
43
(191)
(191)
$
-
$
-
$
191
209
209
132
2014
132
-
-
$
209
$
341
$
341
132
(341)
-
(341)
$
-
$
-
$
341
2015
$
$
148
148
43
43
(191)
(191)
$
148
$
-
$
-
43
-
(191)
-
$
-
$
-
$
-
2014
$
$
209
209
132
132
(341)
(341)
$
209
$
-
$
-
132
-
(341)
-
$
-
$
-
-
$
$
$
$
148
$
Liabilities
148
43
43
2015
Net
Net
Net
(e) Unrecognized deferred tax assets:
(e) Unrecognized deferred tax assets:
e. Unrecognized deferred tax assets:
Set off of tax
Net tax (assets) liabilities
191
$
-
341
$
-
(191)
$
-
(341)
$
-
-
$
-
-
$
-
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:
(e) Unrecognized deferred tax assets:
2014
December 31
2014
December 31
Deferred tax assets have not been recognized in respect of the following items:
18,327
Deductible temporary differences
18,327
Deductible temporary differences
205,521
Tax loss carryforwards
205,521
Tax loss carryforwards
2014
December 31
223,848
223,848
INTERMAP TECHNOLOGIES CORPORATION
18,327
Deductible temporary differences
205,521
Tax loss carryforwards
Notes to Consolidated Financial Statements
The deferred tax asset is recognized when it is probable that future taxable profit will be available to
The deferred tax asset is recognized when it is probable that future taxable profit will be available to
The deferred tax asset is recognized when it is probable that future taxable profit will be available to
223,848
(In thousands of United States dollars, except per share information)
utilize the benefits. The Company has not recognized deferred tax assets with respect to these items
utilize the benefits. The Company has not recognized deferred tax assets with respect to these items
utilize the benefits. The Company has not recognized deferred tax assets with respect to these items
due to the uncertainty of future Company earnings.
Years ended December 31, 2015 and 2014
The deferred tax asset is recognized when it is probable that future taxable profit will be available to
due to the uncertainty of future Company earnings.
due to the uncertainty of future Company earnings.
utilize the benefits. The Company has not recognized deferred tax assets with respect to these items
i.
2015
2015
18,556
18,556
216,241
216,241
2015
234,797
234,797
18,556
216,241
Loss carry forwards:
Loss carry forwards:
$
$
$
$
$
$
$
$
$
$
Page 39
234,797
$
$
due to the uncertainty of future Company earnings.
At December 31, 2015 approximately $216,791 of loss carry forwards and $2,346 of tax credits were
At December 31, 2015, approximately $216,791 of loss carry forwards and $2,346 of tax credits
available in various jurisdictions. A summary of losses by year of expiry are as follows:
were available in various jurisdictions. A summary of losses by year of expiry are as follows:
Twelve months ended December 31,
2018
2020
2021-2034
$
3,135
2,812
210,844
216,791
$
(f) Movement in deferred tax balances during the year:
Balance at
December 31, 2014
Recognized in
Profit and Loss
Recognized
in Equity
Balance at
December 31, 2015
Property and equipment
Convertible note
Tax loss carryforwards
$
209
132
(341)
$
(61)
(89)
150
-
$
-
-
$
148
43
(191)
Net tax (assets) liabilities
$
-
$
-
$
-
$
-
15. 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:
2016
2017
2018
2019
2020
$
566
103
104
105
87
$
965
During the twelve months ended December 31, 2015, the Company recognized $1,123 (year ended
December 31, 2014 - $1,114) in operating lease expense for office space.
16. Segmented information:
The operations of the Company are in one industry segment: digital mapping and related services.
Geographic segments of revenue are as follows:
Year ended December 31,
United States
Asia/Pacific
Europe
$
5,636
$
4,499
2015
1,787
1,219
2014
2,424
1,331
$
8,642
$
8,254
2015 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)
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Notes to Consolidated Financial Statements
Years ended December 31, 2015 and 2014
(In thousands of United States dollars, except per share information)
Years ended December 31, 2015 and 2014
Loss carry forwards:
Years ended December 31, 2015 and 2014
Page 39
Page 39
Page 39
Loss carry forwards:
At December 31, 2015 approximately $216,791 of loss carry forwards and $2,346 of tax credits were
Loss carry forwards:
At December 31, 2015 approximately $216,791 of loss carry forwards and $2,346 of tax credits were
available in various jurisdictions. A summary of losses by year of expiry are as follows:
At December 31, 2015 approximately $216,791 of loss carry forwards and $2,346 of tax credits were
available in various jurisdictions. A summary of losses by year of expiry are as follows:
Twelve months ended December 31,
available in various jurisdictions. A summary of losses by year of expiry are as follows:
$
54
Twelve months ended December 31,
Twelve months ended December 31,
2018
2020
2018
2021-2034
2018
2020
2020
2021-2034
2021-2034
$
$
3,135
2,812
3,135
210,844
2,812
216,791
210,844
216,791
3,135
2,812
210,844
216,791
$
$
$
(f) Movement in deferred tax balances during the year:
(f) Movement in deferred tax balances during the year:
Recognized in
Balance at
(f) Movement in deferred tax balances during the year:
f. Movement in deferred tax balances during the year:
Profit and Loss
December 31, 2014
Recognized in
Balance at
Balance at
Profit and Loss
December 31, 2014
$
$
December 31, 2014
209
132
209
$
(341)
132
(341)
$
-
Recognized in
(61)
Profit and Loss
(89)
(61)
$
$
209
150
(89)
132
150
$
-
(341)
$
-
$
-
Recognized
in Equity
Recognized
Recognized
in Equity
$
-
in Equity
-
-
$
(61)
-
-
(89)
-
$
-
150
$
-
$
-
$
-
$
Property and equipment
Convertible note
Property and equipment
Property and equipment
Tax loss carryforwards
Convertible note
Convertible note
Tax loss carryforwards
Net tax (assets) liabilities
Tax loss carryforwards
Net tax (assets) liabilities
Net tax (assets) liabilities
148
43
148
$
(191)
43
(191)
$
-
$
-
$
-
-
$
-
$
-
$
-
Balance at
December 31, 2015
Balance at
Balance at
December 31, 2015
$
December 31, 2015
The Company has commitments related to operating leases for office space and equipment which
15. Commitments:
15. Commitments:
The Company has commitments related to operating leases for office space and equipment which
15. Commitments:
15. 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:
The Company has commitments related to operating leases for office space and equipment which require
require the following payments for each year ending December 31:
the following payments for each year ending December 31:
2016
2017
2016
2018
2017
2019
2018
2020
2019
2020
require the following payments for each year ending December 31:
$
$
$
148
43
(191)
2016
2017
2018
2019
2020
566
103
566
$
104
103
105
104
87
105
965
87
965
$
566
103
104
105
87
965
$
During the twelve months ended December 31, 2015, the Company recognized $1,123 (year ended
December 31, 2014 - $1,114) in operating lease expense for office space.
During the twelve months ended December 31, 2015, the Company recognized $1,123 (year ended
During the twelve months ended December 31, 2015, the Company recognized $1,123 (year ended
During the twelve months ended December 31, 2015, the Company recognized $1,123 (year ended
December 31, 2014 - $1,114) in operating lease expense for office space.
December 31, 2014 - $1,114) in operating lease expense for office space.
December 31, 2014 - $1,114) in operating lease expense for office space.
16. Segmented information:
16. Segmented information:
16. Segmented information:
16. Segmented information:
The operations of the Company are in one industry segment: digital mapping and related services.
The operations of the Company are in one industry segment: digital mapping and related services.
The operations of the Company are in one industry segment: digital mapping and related services.
Geographic segments of revenue are as follows:
Geographic segments of revenue are as follows:
Geographic segments of revenue are as follows:
Year ended December 31,
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
Years ended December 31, 2015 and 2014
(In thousands of United States dollars, except per share information)
The operations of the Company are in one industry segment: digital mapping and related services.
Geographic segments of revenue are as follows:
2015
2014
Page 40
$
Years ended December 31, 2015 and 2014
Year ended December 31,
United States
Asia/Pacific
Europe
United States
Year ended December 31,
Asia/Pacific
United States
Property and equipment of the Company are located as follows:
Europe
Asia/Pacific
Europe
December 31,
Property and equipment of the Company are located as follows:
Property and equipment of the Company are located as follows:
Canada
United States
December 31,
Asia/Pacific
Canada
Europe
United States
Asia/Pacific
Europe
Intangible assets are located in the United States.
$
$
5,636
2015
1,787
5,636
$
1,219
1,787
8,642
1,219
8,642
$
$
$
$
2014
4,499
2,424
1,331
8,254
2015
$
Page 40
$
$
$
4,499
2014
2,424
4,499
$
1,331
2,424
8,254
1,331
2014
8,254
$
200
2,609
2014
7
200
17
2,609
2,833
7
17
2,833
2015
5,636
1,787
1,219
8,642
117
1,791
2015
5
117
9
1,791
1,922
5
9
1,922
$
$
$
$
$
$
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
Intangible assets are located in the United States.
follows:
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
Year ended December 31,
follows:
Customer A
Year ended December 31,
Customer B
Customer C
Customer A
Customer B
Customer C
$
$
$
$
$
$
2015
$
$
17. Financial risk management:
17. Financial risk management:
The Company has exposure to the following risks from its use of financial instruments: credit risk, market
The Company has exposure to the following risks from its use of financial instruments: credit risk,
17. Financial risk management:
risk, liquidity risk, and capital risk. Management, the Board of Directors, and the Audit Committee monitor
market risk, liquidity risk, and capital risk. Management, the Board of Directors, and the Audit
risk management activities and review the adequacy of such activities. This note presents information about
The Company has exposure to the following risks from its use of financial instruments: credit risk,
Committee monitor risk management activities and review the adequacy of such activities. This
the Company’s exposure to each of the risks as well as the objectives, policies and processes for measuring
market risk, liquidity risk, and capital risk. Management, the Board of Directors, and the Audit
note presents information about the Company’s exposure to each of the risks as well as the
and managing those risks.
Committee monitor risk management activities and review the adequacy of such activities. This
objectives, policies and processes for measuring and managing those risks.
note presents information about the Company’s exposure to each of the risks as well as the
2014
2,873
2014
-
986
2,873
3,859
-
986
3,859
3,823
2015
1,001
-
3,823
4,824
1,001
-
4,824
The Company’s risk management policies are established to identify and analyze the risks faced by
objectives, policies and processes for measuring and managing those risks.
the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to
The Company’s risk management policies are established to identify and analyze the risks faced by
limits. Risk management policies and systems are reviewed regularly to reflect changes in market
the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to
conditions and the Company’s activities. The Company, through its training and management
limits. Risk management policies and systems are reviewed regularly to reflect changes in market
standards and procedures, aims to develop a disciplined and constructive control environment in
conditions and the Company’s activities. The Company, through its training and management
which all employees understand their roles and obligations.
standards and procedures, aims to develop a disciplined and constructive control environment in
(a) Credit risk
which all employees understand their roles and obligations.
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
(a) Credit risk
instrument fails to meet its contractual obligations. Such risks arise principally from certain
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
financial assets held by the Company consisting of outstanding trade receivables and investment
instrument fails to meet its contractual obligations. Such risks arise principally from certain
securities.
financial assets held by the Company consisting of outstanding trade receivables and investment
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each
securities.
customer. However, management also considers the demographics of the Company’s customer
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
2015 Annual Report | Consolidated Financial Statements
55
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
INTERMAP TECHNOLOGIES CORPORATION
roles and obligations.
Notes to Consolidated Financial Statements
a. Credit risk
(In thousands of United States dollars, except per share information)
Years ended December 31, 2015 and 2014
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.
base, including the default risk of the industry and country in which customers operate, as these
Page 41
factors may have an influence on credit risk.
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,
Approximately 44 percent of the Company’s revenue is attributable to transactions with one key
including the default risk of the industry and country in which customers operate, as these factors may
customer (year ended December 31, 2014 - 35 percent of the revenue was attributable to the same
have an influence on credit risk.
customer), approximately 20 percent of the Company’s trade amounts receivable at year end are
Approximately 44 percent of the Company’s revenue is attributable to transactions with one key
attributable to customers located in Asia/Pacific (December 31, 2014 – approximately 45 percent),
customer (year ended December 31, 2014 - 35 percent of the revenue was attributable to the same
and approximately 13 percent of the Company’s trade amounts receivable at year end are
customer), approximately 20 percent of the Company’s trade amounts receivable at year end are
attributable to customers located in Europe (December 31, 2014 – approximately 18 percent).
attributable to customers located in Asia/Pacific (December 31, 2014 – approximately 45 percent), and
approximately 13 percent of the Company’s trade amounts receivable at year end are attributable to
The Company has established a credit policy under which each new customer is analyzed
customers located in Europe (December 31, 2014 – approximately 18 percent).
individually for creditworthiness before the Company’s standard payment and delivery terms and
The Company has established a credit policy under which each new customer is analyzed individually
conditions are offered.
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.
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.
The maximum exposure to credit risk of the Company at period end is the carrying value of these
financial assets.
i. Trade receivables
i.
Trade receivables
Provisions for doubtful accounts are made on a customer-by-customer basis. All write downs
Provisions for doubtful accounts are made on a customer-by-customer basis. All write downs
against receivables are recorded within sales, general and administrative expense in the
against receivables are recorded within sales, general and administrative expense in the
statement of operations. The Company is exposed to credit-related losses on sales to customers
statement of operations. The Company is exposed to credit-related losses on sales to customers
outside North America due to potentially higher risks of collectability.
outside North America due to potentially higher risks of collectability.
Amounts receivable as of December 31, 2015, and December 31, 2014, consist of:
Amounts receivable as of December 31, 2015, and December 31, 2014, consist of:
Trade amounts receivable
Employee receivables
Other miscellaneous receivables
Allowance for doubtful accounts
Trade amounts receivable by geography consist of:
United States
Canada
Asia/Pacific
Europe
December 31, December 31,
2014
2015
$
2,282
7
8
(14)
$
1,386
9
70
(12)
$
2,283
$
1,453
December 31, December 31,
2014
2015
$
1,421
123
449
289
$
454
59
620
253
$
2,282
$
1,386
2015 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, 2015 and 2014
Page 41
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 44 percent of the Company’s revenue is attributable to transactions with one key
customer (year ended December 31, 2014 - 35 percent of the revenue was attributable to the same
customer), approximately 20 percent of the Company’s trade amounts receivable at year end are
attributable to customers located in Asia/Pacific (December 31, 2014 – approximately 45 percent),
and approximately 13 percent of the Company’s trade amounts receivable at year end are
attributable to customers located in Europe (December 31, 2014 – approximately 18 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.
i. Trade receivables
Provisions for doubtful accounts are made on a customer-by-customer basis. All write downs
against receivables are recorded within sales, general and administrative expense in the
statement of operations. The Company is exposed to credit-related losses on sales to customers
outside North America due to potentially higher risks of collectability.
Amounts receivable as of December 31, 2015, and December 31, 2014, consist of:
56
Trade amounts receivable
Employee receivables
Other miscellaneous receivables
Allowance for doubtful accounts
Trade amounts receivable by geography consist of:
Trade amounts receivable by geography consist of:
December 31, December 31,
2014
2015
$
2,282
7
8
(14)
$
1,386
9
70
(12)
$
2,283
$
1,453
December 31, December 31,
2014
2015
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
$
United States
Canada
Asia/Pacific
Europe
1,421
123
449
289
$
454
59
620
253
Years ended December 31, 2015 and 2014
$
2,282
An aging of the Company’s trade amounts receivable are as follows:
An aging of the Company’s trade amounts receivable are as follows:
$
Page 43
1,386
Current
31-60 days
61-90 days
Over 91 days
December 31, December 31,
2014
2015
$
1,795
156
4
327
$
760
48
14
564
$
2,282
$
1,386
As of December 31, 2015, $331 of trade amounts receivable (year ended December 31, 2014 - $578)
As of December 31, 2015, $331 of trade amounts receivable (year ended December 31, 2014 - $578)
were past due. The balance of the past due amounts relates to reoccurring customers and are
were past due. The balance of the past due amounts relates to reoccurring customers and are
considered collectible.
considered collectible.
ii. Investments in securities
Investments in securities
ii.
The Company manages its credit risk surrounding cash and cash equivalents by dealing solely
The Company manages its credit risk surrounding cash and cash equivalents by dealing solely
with what management believes to be reputable banks and financial institutions, and limiting
with what management believes to be reputable banks and financial institutions, and limiting
the allocation of excess funds into financial instruments that management believes to be highly
the allocation of excess funds into financial instruments that management believes to be highly
liquid, low risk investments. The balance at December 31, 2015, is held in cash at banks within the
liquid, low risk investments. The balance at December 31, 2015, is held in cash at banks within
United States, Canada, Europe, Asia, and Australia to facilitate the payment of operations in those
the United States, Canada, Europe, Asia, and Australia to facilitate the payment of operations in
jurisdictions.
those jurisdictions.
b. Market risk
(b) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates,
will affect the Company’s income or the value of its holding of financial instruments.
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest
i.
rates, will affect the Company’s income or the value of its holding of financial instruments.
Foreign exchange risk
i.
Foreign exchange risk
The Company operates internationally and is exposed to foreign exchange risk from various
currencies, primarily the Canadian dollar, Euro, British pound, Indonesian rupiah, Czech Republic
The Company operates internationally and is exposed to foreign exchange risk from various
koruna, Philippines peso, Malaysian ringgit and Australian dollar. Foreign exchange risk arises
currencies, primarily the Canadian dollar, Euro, British pound, Indonesian rupiah, Czech
from sales and purchase transactions as well as recognized financial assets and liabilities that are
Republic koruna, Philippines peso, Malaysian ringgit and Australian dollar. Foreign exchange
denominated in a currency other than the United States dollar, which is the functional currency of
the Company and the majority of its subsidiaries.
risk arises from sales and purchase transactions as well as recognized financial assets and
liabilities that are denominated in a currency other than the United States dollar, which is the
The Company’s primary objective in managing its foreign exchange risk is to preserve sales values
functional currency of the Company and the majority of its subsidiaries.
and cash flows and reduce variations in performance. Although management monitors exposure
to such fluctuations, it does not employ any external hedging strategies to counteract the foreign
The Company’s primary objective in managing its foreign exchange risk is to preserve sales
currency fluctuations.
values and cash flows and reduce variations in performance. Although management monitors
exposure to such fluctuations, it does not employ any external hedging strategies to counteract
the foreign currency fluctuations.
The balances in foreign currencies at December 31, 2015, are as follows:
2015 Annual Report | Consolidated Financial Statements
(in USD)
Years ended December 31, 2015 and 2014
INTERMAP TECHNOLOGIES CORPORATION
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
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
INTERMAP TECHNOLOGIES CORPORATION
Years ended December 31, 2015 and 2014
(In thousands of United States dollars, except per share information)
Notes to Consolidated Financial Statements
Years ended December 31, 2015 and 2014
Years ended December 31, 2015 and 2014
(In thousands of United States dollars, except per share information)
Australian
Dollar
Australian
Dollar
Australian
$
-
Dollar
-
-
$
Australian
(1)
-
Dollar
-
-
$
(1)
-
$
(1)
-
(1)
$
-
-
$
-
$
-
Indonesian
Canadian
Rupiah
Dollar
Indonesian
Canadian
The balances in foreign currencies at December 31, 2015, are as follows:
Cash and
Rupiah
Dollar
(in USD)
Indonesian
Canadian
$
-
$
-
cash equivalents
Dollar
Rupiah
(in USD)
Cash and
19
Amounts receivable
1
-
cash equivalents
$
$
-
Canadian
Indonesian
(604)
Accounts payable and
(167)
Cash and
Amounts receivable
19
1
Dollar
(in USD)
Rupiah
-
accrued liabilities
-
-
cash equivalents
$
-
$
Accounts payable and
(604)
(167)
Amounts receivable
19
1
Cash and
$
(585)
$
(166)
accrued liabilities
-
-
(604)
Accounts payable and
(167)
$
-
cash equivalents
$
-
-
accrued liabilities
-
$
(585)
$
(166)
1
19
Amounts receivable
(167)
(604)
Accounts payable and
(166)
(585)
-
-
accrued liabilities
The balances in foreign currencies at December 31, 2014, are as follows:
British
Pound
British
Pound
British
$
-
Pound
206
-
$
British
(44)
206
Pound
-
-
$
(44)
206
$
162
-
(44)
$
-
-
$
162
206
(44)
162
-
Euro
$
-
Euro
13
$
-
(157)
13
Euro
-
-
$
(157)
13
$
(144)
-
(157)
$
-
-
$
(144)
13
(157)
(144)
-
(1)
(1)
(1)
$
$
$
$
Euro
Page 44
Page 44
Czech
Republic
Czech
Koruna
Republic
Page 44
Czech
Koruna
Republic
$
-
Koruna
Czech
48
-
$
Republic
(114)
48
Koruna
-
$
-
(114)
48
$
(66)
-
(114)
$
-
-
(66)
$
48
(114)
(66)
$
-
Malaysian
Ringgit
Malaysian
Ringgit
Malaysian
$
-
Ringgit
-
-
$
Malaysian
-
-
Ringgit
-
-
$
-
-
$
-
-
-
$
-
-
$
-
-
-
-
$
-
Page 44
57
-
(1)
162
Euro
(585)
(144)
(166)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Malaysian
Ringgit
Malaysian
Ringgit
Malaysian
$
-
Ringgit
66
Australian
Dollar
Australian
Dollar
Australian
$
-
Dollar
53
-
$
Malaysian
66
Ringgit
-
-
$
66
$
66
-
$
-
-
$
66
66
66
$
-
Australian
53
Dollar
(11)
-
$
53
$
42
(11)
$
-
(11)
$
42
53
42
(11)
(66)
Czech
Republic
Czech
Koruna
Republic
Czech
Koruna
Republic
23
Koruna
Czech
80
23
Republic
80
Koruna
(124)
23
80
(21)
(124)
23
(124)
(21)
80
(21)
(124)
Euro
$
5
Euro
17
$
5
17
Euro
(188)
5
$
17
(166)
$
(188)
$
5
(188)
$
(166)
17
(166)
(188)
British
Pound
British
Pound
British
$
-
Pound
139
$
-
British
139
Pound
(725)
-
$
139
(586)
$
(725)
$
-
(725)
$
(586)
139
(586)
(725)
Indonesian
Rupiah
Indonesian
Rupiah
Indonesian
$
13
Rupiah
-
$
13
Indonesian
-
Rupiah
(152)
$
13
-
$
(139)
(152)
$
13
(152)
$
(139)
-
(139)
(152)
The balances in foreign currencies at December 31, 2014, are as follows:
The balances in foreign currencies at December 31, 2014, are as follows:
Canadian
The balances in foreign currencies at December 31, 2014, are as follows:
Dollar
(in USD)
Canadian
The balances in foreign currencies at December 31, 2014, are as follows:
Cash and
Dollar
(in USD)
Canadian
(4)
cash equivalents
(in USD)
Dollar
Cash and
81
Amounts receivable
(4)
cash equivalents
Canadian
Accounts payable and
Cash and
81
Amounts receivable
Dollar
(in USD)
(478)
accrued liabilities
(4)
cash equivalents
Accounts payable and
81
Amounts receivable
Cash and
(401)
(478)
accrued liabilities
Accounts payable and
(4)
cash equivalents
(478)
accrued liabilities
(401)
81
Amounts receivable
Accounts payable and
(401)
Based on the net exposures at December 31, 2015 and 2014, and assuming that all other
(478)
accrued liabilities
Based on the net exposures at December 31, 2015 and 2014, and assuming that all other
variables remain constant, a 10% depreciation or appreciation of the United States dollar
$
$
Based on the net exposures at December 31, 2015 and 2014, and assuming that all other variables
Based on the net exposures at December 31, 2015 and 2014, and assuming that all other
against the following currencies would result in an increase / (decrease) in net earnings by the
variables remain constant, a 10% depreciation or appreciation of the United States dollar
remain constant, a 10% depreciation or appreciation of the United States dollar against the
variables remain constant, a 10% depreciation or appreciation of the United States dollar
amounts shown below:
against the following currencies would result in an increase / (decrease) in net earnings by the
following currencies would result in an increase / (decrease) in net earnings by the amounts
Based on the net exposures at December 31, 2015 and 2014, and assuming that all other
against the following currencies would result in an increase / (decrease) in net earnings by the
amounts shown below:
shown below:
variables remain constant, a 10% depreciation or appreciation of the United States dollar
December 31, 2015
amounts shown below:
against the following currencies would result in an increase / (decrease) in net earnings by the
December 31, 2015
(in USD)
December 31, 2015
amounts shown below:
(in USD)
United States dollar:
December 31, 2015
Depreciates 10%
(in USD)
United States dollar:
Appreciates 10%
Depreciates 10%
United States dollar:
Appreciates 10%
(in USD)
Depreciates 10%
Appreciates 10%
December 31, 2014
United States dollar:
Depreciates 10%
December 31, 2014
Appreciates 10%
(in USD)
December 31, 2014
Czech
Republic
Czech
Koruna
Republic
Czech
Koruna
Republic
$
7
Koruna
Czech
(7)
7
$
Republic
(7)
Koruna
7
$
(7)
Indonesian
Rupiah
Indonesian
Rupiah
Indonesian
$
17
Rupiah
(17)
$
17
Indonesian
(17)
Rupiah
17
(17)
Australian
Dollar
Australian
Dollar
Australian
$
-
Dollar
-
-
$
Australian
-
Dollar
-
$
-
Malaysian
Ringgit
Malaysian
Ringgit
Malaysian
$
-
Ringgit
-
-
$
Malaysian
-
Ringgit
-
$
-
Canadian
Dollar
Canadian
Dollar
Canadian
59
Dollar
(59)
59
Canadian
(59)
Dollar
59
(59)
British
Pound
British
Pound
British
(16)
Pound
16
(16)
British
16
Pound
(16)
16
Euro
14
Euro
(14)
14
(14)
Euro
14
(14)
$
-
14
(14)
Euro
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Euro
(139)
(586)
(401)
(166)
(21)
66
42
$
$
$
$
(in USD)
United States dollar:
December 31, 2014
Depreciates 10%
(in USD)
United States dollar:
Appreciates 10%
Depreciates 10%
United States dollar:
Appreciates 10%
(in USD)
Depreciates 10%
Appreciates 10%
Interest rate risk
United States dollar:
$
Depreciates 10%
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
Appreciates 10%
fluctuate because of changes in market interest rates.
Interest rate risk
Interest rate risk
Euro
17
Euro
(17)
17
(17)
Euro
17
(17)
Interest rate risk
2
$
(2)
$
$
$
$
$
17
(17)
14
(14)
40
(40)
59
(59)
$
$
$
$
$
$
$
$
$
(4)
4
(16)
British
16
Pound
British
Pound
British
59
Pound
(59)
59
British
(59)
Pound
59
(59)
$
17
Indonesian
(17)
Rupiah
Indonesian
Rupiah
Indonesian
14
Rupiah
(14)
14
Indonesian
(14)
Rupiah
14
(14)
Czech
$
7
Republic
(7)
Czech
Koruna
Republic
Czech
Koruna
Republic
$
2
Koruna
Czech
(2)
$
2
Republic
(2)
Koruna
2
$
(2)
$
-
Malaysian
-
Ringgit
Malaysian
Ringgit
Malaysian
(7)
Ringgit
7
(7)
Malaysian
7
Ringgit
(7)
$
7
$
$
$
-
Australian
-
Dollar
Australian
Dollar
Australian
(4)
Dollar
4
(4)
Australian
4
Dollar
(4)
4
$
59
Canadian
(59)
Dollar
Canadian
Dollar
Canadian
40
Dollar
(40)
40
Canadian
(40)
Dollar
40
(40)
$
(7)
7
ii.
ii.
ii.
ii.
ii.
Interest rate risk
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, 2015, or December 31, 2014.
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
principal 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.
2015 Annual Report | Consolidated Financial Statements
58
c.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due
(see Note 2(a) – Going Concern). 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)
INTERMAP TECHNOLOGIES CORPORATION
Years ended December 31, 2015 and 2014
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, 2015,
the Company has a cash and cash equivalent balance of $Nil (year ended December 31, 2014 – $537)
and working capital of negative $16,581 (year ended December 31, 2014 – negative $8,748). All of
The following are the contractual maturities of the undiscounted cash flows of financial liabilities as
the Company’s financial liabilities, other than convertible notes and notes payable, obligations under
Page 46
of December 31, 2015:
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
The following are the contractual maturities of the undiscounted cash flows of financial liabilities as of
of December 31, 2015:
December 31, 2015:
Years ended December 31, 2015 and 2014
Payment due:
Page 46
Accounts payable
and accrued liabilities
Warrant liabilities(1)
Accounts payable
Convertible and other
and accrued liabilities
notes payable
Warrant liabilities(1)
Future interest on convertible
Convertible and other
and other notes payable
notes payable
Project financing
Future interest on convertible
Other long-term liabilities
and other notes payable
Obligations under
Project financing
finance leases
Other long-term liabilities
Obligations under
finance leases
In less than 3
months
$
In less than 3
6,521
months
-
Between
3 months and 6
months
Between
3 months and 6
$
-
months
-
Between
6 months and 1
Payment due:
year
Between
6 months and 1
351
$
year
-
Between
1 year and 2
years
Between
2 years and 5
years
Between
1 year and 2
$
-
years
1,804
Between
2 years and 5
$
-
years
281
$
6,521
-
$
-
7,500
-
380
-
-
$
351
7,300
-
927
$
-
7,300
1,804
-
$
-
281
-
1,121
-
189
7,500
380
-
-
7,300
927
-
-
7,300
174
-
189
-
-
-
-
-
-
$
1,121
38
189
7,869
38
$
-
38
-
7,918
38
$
6
-
-
8,584
6
$
12
174
189
9,479
12
27
-
-
$
308
27
(1) The warrant liabilities are 100% vested and can be exercised by the holders at any time;
$
$
$
$
$
7,869
7,918
8,584
9,479
308
however, the obligation is non-cash and will be settled in equity (see Note 13).
(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 time;
cash and will be settled in equity (see Note 13).
The following are the contractual maturities of the undiscounted cash flows of financial liabilities as
The following are the contractual maturities of the undiscounted cash flows of financial liabilities as of
of December 31, 2014:
December 31, 2014:
The following are the contractual maturities of the undiscounted cash flows of financial liabilities as
however, the obligation is non-cash and will be settled in equity (see Note 13).
of December 31, 2014:
Payment due:
Accounts payable
and accrued liabilities
and accrued liabilities
Warrant liabilities(1)
Accounts payable
Convertible Note
Warrant liabilities(1)
Note payable
Other long-term liabilities
Convertible Note
Obligations under
Note payable
finance leases
Other long-term liabilities
Obligations under
finance leases
In less than 3
months
$
$
In less than 3
2,749
months
226
5,500
2,749
1,168
226
-
5,500
1,168
38
-
Between
3 months and 6
months
Between
3 months and 6
$
-
months
$
-
500
$
-
-
-
-
500
-
38
-
Payment due:
Between
6 months and 1
year
Between
6 months and 1
1,036
$
year
$
-
1,036
-
-
-
75
-
-
-
-
$
Between
1 year and 2
years
Between
2 years and 5
years
Between
1 year and 2
$
-
years
-
$
-
$
-
$
-
122
-
-
3
-
-
-
122
79
3
3
Between
2 years and 5
$
-
years
-
$
-
-
3
26
$
9,681
38
$
538
38
$
1,111
75
204
$
79
$
26
29
(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 time;
29
non-cash and will be settled in equity (see Note 13).
(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 13).
$
$
$
$
$
1,111
9,681
538
204
however, the obligation is non-cash and will be settled in equity (see Note 13).
(d) Capital risk
The Company’s objectives when managing its capital risk is to safeguard its assets, while at the same
(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
time maintaining investor, creditor, and market confidence, and to sustain future development of
The Company’s objectives when managing its capital risk is to safeguard its assets, while at the same
implementing the strategies below.
time maintaining investor, creditor, and market confidence, and to sustain future development of
d. Capital risk
2015 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, 2015 and 2014
Page 47
the business and ultimately protect shareholder value. The Company manages its risks and
exposures by implementing the strategies below.
The Company includes shareholders’ deficiency, long-term convertible and other notes payable and
long-term portion of obligations under finance leases in the definition of capital. Total capital at
59
December 31, 2015, was negative $14,913 (December 31, 2014 – negative $6,219). To maintain or
characteristics, acquire or dispose of assets, or adjust the amount of cash and short-term investment
The Company includes shareholders’ deficiency, long-term convertible and other notes payable
adjust the capital structure, the Company may issue new shares, issue new debt with different
and long-term portion of obligations under finance leases in the definition of capital. Total capital
at December 31, 2015, was negative $14,913 (December 31, 2014 – negative $6,219). To maintain
or adjust the capital structure, the Company may issue new shares, issue new debt with different
characteristics, acquire or dispose of assets, or adjust the amount of cash and short-term investment
The Company has established a budgeting and planning process with a focus on cash, working
balances held.
balances held.
capital, and operational expenditures and continuously assesses its capital structure in light of
The Company has established a budgeting and planning process with a focus on cash, working
current economic conditions and changes in the Company’s short-term and long-term plans.
capital, and operational expenditures and continuously assesses its capital structure in light of current
Neither the Company nor any of its subsidiaries are subject to externally imposed capital
economic conditions and changes in the Company’s short-term and long-term plans. Neither the
Company nor any of its subsidiaries are subject to externally imposed capital requirements.
requirements.
18. Fair values:
18. 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 Company's
Set out below is a comparison by class of the carrying amounts and fair value of the Company’s
financial instruments that are carried in the Consolidated Balance Sheet:
financial instruments that are carried in the Consolidated Balance Sheet:
December 31, 2015
Carrying
Amount
Fair
Value
December 31, 2014
Carrying
Amount
Fair
Value
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
Other financial liabilities:
Convertible notes and notes payable
Accounts payable and accrued liabilities
$
$
$
$
801
2,283
3,084
801
2,283
3,084
537
1,453
1,990
537
1,453
1,990
$
$
$
$
$
2,085
$
2,085
$
226
$
226
16,387
6,872
25,344
$
20,193
6,872
29,150
$
5,313
3,785
9,324
$
5,313
3,785
9,324
$
The fair values of the financial assets and liabilities are shown at the amount at which the instrument
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
could be exchanged in a current transaction between willing parties, other than in a forced or
liquidation sale.
liquidation sale.
The following methods and assumptions were used to estimate the fair values:
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 13).
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
fair value hierarchy has the following levels:
Level 1 – valuations based on quoted prices (unadjusted) in active markets for identical assets or
liabilities;
2015 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, 2015 and 2014
Page 48
• 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 13).
(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 fair value hierarchy has the following levels:
60
Level 1 – valuations based on quoted prices (unadjusted) in active markets for identical assets or
liabilities;
observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from
Level 2 – valuation techniques based on inputs other than quoted prices included in Level 1 that are
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;
prices;
Level 3 – valuation techniques using inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
Level 3 – valuation techniques using inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The fair value hierarchy 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:
Financial liabilities
Non-broker warrants
December 31, 2015
Level 1 Level 2 Level 3
December 31, 2014
Level 1
Level 2 Level 3
$
-
$
2,085
$
-
$
-
$
226
$
-
During the reporting periods, there were no transfers between Level 1 and Level 2 fair value
During the reporting periods, there were no transfers between Level 1 and Level 2 fair value
measurements.
measurements.
19. Key management personnel and director compensation:
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)
19. Key management personnel and director compensation:
Years ended December 31, 2015 and 2014
Years ended December 31, 2015 and 2014
compensation and share option plans (Note 12).
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
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
Page 49
Page 49
aggregated competitive pay in light of business achievement, fulfillment of individual objectives and overall
that reflect aggregated competitive pay in light of business achievement, fulfillment of individual
job performance. Executive officers participate in the Company’s share compensation and share option
As of December 31, 2015, the Chief Executive Officer and Chief Financial Officer are each entitled
As of December 31, 2015, the Chief Executive Officer and Chief Financial Officer are each entitled
objectives and overall job performance. Executive officers participate in the Company’s share
plans (Note 12).
to an amount equal to one year’s annual base salary in the event the Company were to terminate
to an amount equal to one year’s annual base salary in the event the Company were to terminate
their employment agreement, other than due to a material breach of the employment agreement or
their employment agreement, other than due to a material breach of the employment agreement or
As of December 31, 2015, 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
in the event the Company becomes insolvent.
in the event the Company becomes insolvent.
employment agreement, other than due to a material breach of the employment agreement or in the event
The compensation of non-employee directors consists of a cash component and a share component.
The compensation of non-employee directors consists of a cash component and a share component.
the Company becomes insolvent.
Directors participate in the Company’s share option plan and director’s share compensation plan
Directors participate in the Company’s share option plan and director’s share compensation plan
The compensation of non-employee directors consists of a cash component and a share component.
(Note 12).
(Note 12).
Directors participate in the Company’s share option plan and director’s share compensation plan (Note 12).
The following summarizes key management personnel and directors compensation for the years
The following summarizes key management personnel and directors compensation for the years
The following summarizes key management personnel and directors compensation for the years ended
ended December 31, 2015 and 2014:
ended December 31, 2015 and 2014:
December 31, 2015 and 2014:
Year ended December 31,
Year ended December 31,
Short-term employee benefits
Short-term employee benefits
Share-based payments
Share-based payments
LTIP
LTIP
2015
2015
2014
2014
$
$
$
$
1,540
1,540
178
178
325
325
2,043
2,043
1,414
1,414
204
204
37
37
1,655
1,655
$
$
$
$
The following summarizes key management personnel and directors share ownership of the Company as of
The following summarizes key management personnel and directors share ownership of the
The following summarizes key management personnel and directors share ownership of the
December 31, 2015 and 2014:
Company as of December 31, 2015 and 2014:
Company as of December 31, 2015 and 2014:
December 31,
December 31,
Number of Class A Common shares held
Number of Class A Common shares held
Percentage of total Class A Common shares issued
Percentage of total Class A Common shares issued
2015
2015
3,528,520
3,528,520
3.52%
3.52%
2014
2014
1,931,679
1,931,679
2.10%
2.10%
20. Subsequent events:
20. Subsequent events:
On February 4, 2016, the Company amended the July 13, 2015 note payable, with an original
On February 4, 2016, the Company amended the July 13, 2015 note payable, with an original
maturity of January 9, 2016. The maturity was extended to April 9, 2016, with all other terms
maturity of January 9, 2016. The maturity was extended to April 9, 2016, with all other terms
remaining unchanged.
remaining unchanged.
On February 4, 2016, the Company amended the January 14, 2015 note payable, with an original
On February 4, 2016, the Company amended the January 14, 2015 note payable, with an original
maturity of January 14, 2016. The maturity was extended to April 14, 2016, with all other terms
maturity of January 14, 2016. The maturity was extended to April 14, 2016, with all other terms
remaining unchanged.
remaining unchanged.
On March 3, 2016, the Company restructured and consolidated the February 23, 2015 notes payable
On March 3, 2016, the Company restructured and consolidated the February 23, 2015 notes payable
of $5,800 and $1,500 into one note. The original notes, bearing interest at 25% per annum, were
of $5,800 and $1,500 into one note. The original notes, bearing interest at 25% per annum, were
canceled with the related principal of $7,300 and accrued interest of $1,825 consolidated into a new
canceled with the related principal of $7,300 and accrued interest of $1,825 consolidated into a new
note payable of $9,125, bearing interest at a rate of 15% and maturity date of August 24, 2016. The
note payable of $9,125, bearing interest at a rate of 15% and maturity date of August 24, 2016. The
royalty agreement (note 7(e)) and agreement to restrict a certain portion of cash collections (note
royalty agreement (note 7(e)) and agreement to restrict a certain portion of cash collections (note
7(g)) are not affected by this restructuring and consolidation.
7(g)) are not affected by this restructuring and consolidation.
2015 Annual Report | Consolidated Financial Statements
61
20. Subsequent events:
On February 4, 2016, the Company amended the July 13, 2015 note payable, with an original maturity of
January 9, 2016. The maturity was extended to April 9, 2016, with all other terms remaining unchanged.
On February 4, 2016, the Company amended the January 14, 2015 note payable, with an original maturity of
January 14, 2016. The maturity was extended to April 14, 2016, with all other terms remaining unchanged.
On March 3, 2016, the Company restructured and consolidated the February 23, 2015 notes payable of
$5,800 and $1,500 into one note. The original notes, bearing interest at 25% per annum, were canceled
with the related principal of $7,300 and accrued interest of $1,825 consolidated into a new note payable
of $9,125, bearing interest at a rate of 15% and maturity date of August 24, 2016. The royalty agreement
(note 7(e)) and agreement to restrict a certain portion of cash collections (note 7(g)) are not affected by this
restructuring and consolidation.
2015 Annual Report | Consolidated Financial Statements 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:
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