2023
ANNUAL REPORT
Intermap Technologies Corporation
Corporate Information
OFFICES
Canadian Corporate Offi ce
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.
385 Inverness Parkway
Suite 105
Englewood, CO 80112-5809
United States
Phone: (303) 708-0955
Fax: (303) 708-0952
BOARD OF DIRECTORS
Partick A. Blott
Chairman and CEO
New York, New York, USA
Philippe Frappier
Director
Toronto, Ontario, Canada
TRANSFER AGENT
Odyssey Trust Company
1230 - 300 5th Ave SW
Calgary, Alberta T2P 3C4
Canada
AUDITORS
KPMG LLP
150 Elgin Street
Suite 1800
Ottawa, ON K2P 2P8
Canada
P.T. ExsaMap Asia
Wisma Anugraha - 2nd Floor
Jl. Taman Kemang No.32B
Jakarta, Selatan 12510
Indonesia
Phone: +62 021 719 3808
Fax: +62 021 719 3818
Intermap Technologies s.r.o.
Zelený pruh 95/97
140 00 Prague 4
Czech Republic
Phone: +420 261 341 411
Fax +420 261 341 414
Jordan Tongalson
Director
New York, New York, USA
John Hild
Director
Ellicott City, Maryland, USA
STOCK EXCHANGE
INTERMAP STOCK IS LISTED
ON THE TORONTO STOCK
EXCHANGE UNDER THE
SYMBOL “IMP”
AND THE OTCQX® BEST MARKET UNDER THE
SYMBOL “ITMSF”
OFFICERS AND KEY PERSONNEL
Patrick A. Blott
Chairman and CEO
Jennifer S. Bakken
Exceutive Vice President and CFO
Management’s Discussion and Analysis
1
For the year ended December 31, 2023
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 April 1, 2024 and should be read
together with the Company’s audited Consolidated Financial Statements and the accompanying notes
for the years ended December 31, 2023 and 2022. The results reported herein have been prepared in
accordance with IFRS Accounting Standards and, unless otherwise noted, are expressed in United States
dollars.
The audited Consolidated Financial Statements have been prepared on a going concern basis in accordance
with IFRS Accounting Standards. The going concern basis of presentation assumes the Company will
continue to operate for the foreseeable future and will be able to realize its assets and discharge its liabilities
in the normal course of business.
The Consolidated Financial Statements do not re(cid:248) ect adjustments that would be necessary if the going
concern assumption were not appropriate. If the going concern basis were not appropriate for these
(cid:246) nancial statements, then adjustments would be necessary to the carrying amounts of assets and liabilities,
the reported expenses and the classi(cid:246) cations used in the statements of (cid:246) nancial position.
Additional information relating to the Company, including the Company’s AIF, can be found on the
Company’s website at www.intermap.com and on SEDAR at www.sedar.com.
NONGAAP MEASURES
This MD&A makes reference to certain non-GAAP measures such “EBITDA” and “Adjusted EBITDA”. These
non-GAAP measures are not recognized, de(cid:246) ned or standardized measures under IFRS. The Company’s
de(cid:246) nition of EBITDA and Adjusted EBITDA will likely diff er from that used by other companies and therefore
comparability may be limited. EBITDA and Adjusted EBITDA should not be considered a substitute for or
in isolation from measures prepared in accordance with GAAP. These non-GAAP measures should be read
in conjunction with the Company’s audited Consolidated Financial Statements and the accompanying
notes for the years ended December 31, 2023 and 2022. Readers should not place undue reliance on non-
GAAP measures and should instead view them in conjunction with the most comparable GAAP (cid:246) nancial
measures. See the reconciliation of EBITDA and Adjusted EBITDA to the most comparable GAAP (cid:246) nancial
measure in the Reconciliation of Non-GAAP Measures section of this MD&A.
FORWARDLOOKING 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, operations and (cid:246) nancing
alternatives, certain statements and information provided in this MD&A constitute forward-looking
statements or information (collectively, “forward-looking statements”). Forward-looking statements are
typically identi(cid:246) ed by words such as “may”, “will”, “should”, “could”, “anticipate”, “expect”, “project”, “estimate”,
“forecast”, “plan”, “intend”, “target”, “believe”, and similar expressions suggesting future outcomes, and
includes statements that actions, events, or conditions “may,” “would,” “could,” or “will” be taken or occur in
the future. These forward-looking statements may be based on assumptions that the Company believes to
be reasonable based on the information available on the date such statements are made, such statements
are not guarantees of future performance and readers are cautioned against placing undue reliance on
forward-looking statements. By their nature, these statements involve a variety of assumptions, known and
unknown risks and uncertainties, and other factors which may cause actual results, levels of activity, and
2
2023 Annual Report | Management’s Discussion and Analysis
achievements to diff er 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.
Forward-looking information and statements in this MD&A include, but are not limited to the following:
•
•
•
•
increases in recurring revenue generated from multi-license contracts in Europe and software
subscription renewal value increase;
all trade receivable balances are highly likely to be paid in full by the customer;
the factors noted under “Liquidity and Capital Resources” in the aggregate indicate there are material
uncertainties which may cast signi(cid:246) cant doubt about the Company’s ability to continue as a going
concern;
failure to achieve certain requirements could have a material adverse eff ect on the Company’s (cid:246) nancial
condition and/or results of operations.
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) payments on material contracts will occur within a reasonable period of time after
contract completion; (iii) the continued sales success of Intermap’s products and services; (iv) the continued
success of business development activities; (v) there will be no signi(cid:246) cant delays in the development
and commercialization of the Company’s products; (vi) the Company will continue to maintain suffi cient
and eff ective production and software development capabilities to compete on the attributes and cost
of its products; (vii) there will be no signi(cid:246) cant reduction in the availability of quali(cid:246) ed and cost-eff ective
human resources; (viii) the continued existence and productivity of subsidiary operations; (ix) demand for
geospatial related products and services will continue to grow in the foreseeable future; (x) there will be no
signi(cid:246) cant 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, (xii) superior technologies/products do not develop that would render the
Company’s current product off erings obsolete, and (xiii) impact of a potential future pandemic on the
Company’s future operations and performance.
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 (cid:248) uctuations, nature of
government contracts, economic conditions, loss of key customers, retention and availability of executive
talent, competing technologies, continued listing of its common shares on the Toronto Stock Exchange or
equivalent exchange, 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 and
uncertainties discussed under the heading “Risk Factors” in the annual MD&A and the Company’s other
(cid:246) lings 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 quali(cid:246) ed in their entirety by these cautionary statements.
2023 Annual Report | Management’s Discussion and Analysis
3
BUSINESS OVERVIEW
Intermap is a global geospatial intelligence company, creating a wide variety of geospatial solutions and
analytics for its customers. Intermap is a premier worldwide provider of geospatial data solutions.
Intermap currently generates revenue from three primary business activities, composed of (i) data
acquisition and collection, using proprietary radar sensor technologies; (ii) value-added data products
and services, which leverage the Company’s proprietary NEXTMap® database, together with proprietary
software and fusion technologies; and (iii) commercial applications and solutions, including a webstore and
software sales targeting selected industry verticals that rely on accurate high resolution elevation data.
These geospatial solutions are used in a wide range of applications including, but not limited to, location-
based information, risk assessment, geographic information systems (GIS), engineering, utilities, global
positioning systems (GPS) maps, oil and gas, renewable energy, hydrology, environmental planning, land
management, wireless communications, transportation, advertising, and 3D visualization.
Intermap has the ability to create its own digital 3D geospatial data using its proprietary multi-frequency
radar mounted in Learjet aircraft. Intermap’s radar-based technology allows it to collect data at any time
of the day, including under conditions such as cloud and tree cover, or darkness, which are conditions that
limit most competitive technologies. The Company’s proprietary radar also enables data to be collected
over larger areas, at higher collection speeds, and at accuracy levels that are diffi cult to achieve with
competitive technologies.
In addition to data collection, the Company is a world leader in data fusion, analytics, and orthorecti(cid:246) cation,
and has decades of experience aggregating data derived from a number of diff erent sensor technologies
and data sources. The Company processes raw digital elevation and image data from its own and other
sources to create three high resolution geospatial datasets that provide a ground-true foundation layer
upon which accurate value-added products and services can be developed. The three high resolution data
sets include digital surface models (DSM), digital terrain models (DTM), and orthorecti(cid:246) ed radar images
(ORI). These datasets are further augmented with additional elevation and resolution data layers and served
to customers by web service to create other value-added products, such as viewsheds, line of sight maps,
and orthorecti(cid:246) ed mosaic tiles.
Unlike many geospatial companies, because of its unique acquisition and processing capability, Intermap
retains exclusive ownership of its high resolution NEXTMap® database, which covers the entire globe.
Intermap’s NEXTMap database, together with third party data and our in-house analytics team, provide a
variety of applications and geospatial solutions for its customers. The NEXTMap database contains a fusion
of proprietary multi-frequency radar imagery and data, including unique Interferometric Synthetic Aperture
Radar (IFSAR)-derived data, proprietary data models, and purchased third-party data, collected from
multiple commodity sensor technologies, such as light detection and ranging (LiDAR), photogrammetry,
satellite, and other available sources. The NEXTMap database also includes proprietary information
developed by our analytical teams such as 3D city models, census data, real-time traffi c, 3D road vectors,
outdoor advertising assets, weather related hazards, points of interest, cellular towers, (cid:248) ood models and
wild(cid:246) re models.
The Company generates revenue by licensing its geospatial products using its proprietary data, analytics,
and applications for speci(cid:246) c industries.
4
2023 Annual Report | Management’s Discussion and Analysis
FINANCIAL INFORMATION AND DISCUSSION OF OPERATIONS
The following table sets forth selected (cid:246) nancial information for the periods indicated.
Selected Annual Information
Revenue
Year-to-date Revenue
Consolidated revenue for the year ended December 31, 2023 was $6.2 million, compared to $6.8
million for 2022. Approximately 65% of consolidated revenue was generated outside the United
States, compared to 69% for 2022.
Acquisition Services
Acquisition services revenue for the year ended December 30, 2023 totaled $Nil, compared to
$1.1 million for 2022. The decrease is due to delays in foreign government contracting and the
related revenue recognition activities. Subsequent to year end, the Company announced a material
acquisition services contract, which will begin generating revenue in the fi rst quarter of 2024.
Value-added Data
Value-added data revenue decreased to $1.9 million for the year ended December 31, 2023 as
compared to $2.3 million for 2022. The change relates to ordinary course delays in repeating
contracts.
Software and Solutions
Software and solutions revenue increased to $4.3 million from $3.4 million for the years
ended December 31, 2023 and 2022, respectively. The Company recognized a 23% increase in
subscription-based revenue, driven by the expansion of the European insurance market and growth
in InsitePro license values.
2023 Annual Report | Management’s Discussion and Analysis
5
Classification of Operating Costs
The composition of the operating costs on the Consolidated Statements of Loss and Other
Comprehensive Loss is as follows:
Personnel
Personnel expense includes direct labor, employee compensation, employee bene(cid:246) ts, and commissions.
Personnel expense for the years ended December 31, 2023 and 2022 totaled $5.7 million and $6.6 million,
respectively. The decrease salary savings during the last half of 2023.
As of December 31, 2023, 35% of the headcount relates to software and data development, 33% is in the
Jakarta Production Center, 18% relates to sales and marketing and 14% is corporate services.
Non-cash compensation expense is included in operating costs and relates to the Company’s omnibus
incentive plan and shares granted to employees and non-employees. Non-cash share-based compensation
for the years ended December 31, 2023 and 2022, decreased to $304 thousand from $412 thousand,
respectively. The decrease is due to timing of award issuances.
Purchased Services and Materials
Purchased services and materials (PS&M) includes (i) aircraft and radar related costs, including jet fuel; (ii)
insurance, professional and consulting costs; (iii) third-party support services related to the collection,
processing and editing of the Company’s airborne radar data collection activities; (iv) third-party 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, 2023, and 2022, PS&M expense was $2.0 million and $2.8 million,
respectively. The decrease is primarily related to the subcontractor charges on the acquisition services
project revenue during 2022 compared to 2023.
Facilities and Other Expenses
For the years ended December 31, 2023 and 2022, facilities and other expenses decreased slightly to $0.6
million from $0.7 million.
Travel
For the years ended December 31, 2023 and 2022, travel expense remained unchanged at $0.1 million each
year.
Net Loss
For the year ended December 31, 2023, net loss improved to a $3.7 million loss from a $5.3 million loss for
the year ended December 31, 2022. The improvement is mainly due to decreased operating costs.
Reconciliation of Non- GAAP Measures
To supplement the audited Consolidated Financial Statements, which are prepared and presented in
accordance with GAAP, the Company provides the following non-GAAP (cid:246) nancial measures: EBITDA and
Adjusted EBITDA, as EBITDA and Adjusted EBITDA are included as a supplemental disclosure because
6
2023 Annual Report | Management’s Discussion and Analysis
Management believes that such measurement provides a better assessment of the Company’s operations
on a continuing basis by eliminating certain non-cash charges or gains that are nonrecurring.
The term Earnings before interest, taxes, depreciation and amortization (EBITDA) consists of net loss and
excludes interest ((cid:246) nancing costs), taxes, and depreciation. Adjusted EBITDA also excludes working capital
investment, share-based compensation, fair value adjustments and foreign currency translation.
The most directly comparable measure to EBITDA and Adjusted EBITDA calculated in accordance with IFRS
is net loss. The following is a reconciliation of the Company’s net loss to Adjusted EBITDA.
U.S. $ millions
Net loss
Financing costs
Amortization of intangible assets
Depreciation of property and equipment
Depreciation of right of use assets
Income tax expense
EBITDA
Working capital investment
(Decrease) Increase in unearned revenue
Change in fair value of investment
Share-based compensation
Loss (gain) on foreign currency translation
Adjusted EBITDA
2023
2022
$
(3.7)
0.1
0.3
0.5
0.3
0.1
$
(5.3)
0.1
0.3
1.1
0.3
-
$
(2.4)
$
(3.5)
(0.4)
0.2
0.3
0.1
1.2
-
0.4
0.1
$
(2.2)
$
(1.8)
EBITDA for the year ended December 31, 2023 improved $1.1 compared to the prior year, due to operating
cost savings implemented in the second half of the year, designed to ensure the Company would be
properly positioned to sustain the foreign government contracting delays.
Adjusted EBITDA for the year ended December 31, 2023 was negative $2.2 million, compared to negative
$1.8 million for 2022. The worsening of Adjusted EBITDA is primarily due to the timing of collections
impacting the unearned revenue balance in each period.
Financing Costs
Financing costs for the year ended December 31, 2023 totaled $61 thousand compared to $57 thousand for
2022.
Amortization of Intangible Assets
Amortization expense for intangible assets for the years ended December 31, 2023 and 2022 were $0.3
million and $0.3 million, respectively.
Depreciation of Property and Equipment
Depreciation expense for property and equipment for the years ended December 31, 2023 and 2022 were
$0.5 million and $1.1 million, respectively. The decrease is due to older assets reaching their useful lives with
few equipment additions.
Depreciation of Right of Use Assets
Depreciation expense for right of use assets for the years ended December 31, 2023 and 2022 was $0.3
million and $0.3 million, respectively.
Income Tax Expense
Income tax expense for the year ended December 31, 2023 totaled $57 thousand compared to $11
thousand for 2022.
2023 Annual Report | Management’s Discussion and Analysis
7
Amounts Receivable and Unbilled Revenue
Work is performed on contracts that provide invoicing upon the completion of identi(cid:246) ed contract
milestones. Revenue on certain of these acquisition services 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 eff ort is made to align payments on contracts 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
statements of (cid:246) nancial position as unbilled revenue.
Amounts receivable and unbilled revenue decreased to $0.3 million at December 31, 2023 from $1.3 million
at December 31, 2022. The Company reviews the amounts receivable aging monthly and monitors the
payment status of each invoice to determine the collectability. At the statement of (cid:246) nancial position date,
$Nil has been reserved as uncollectible as all trade receivable balances greater than 90 days are highly likely
to be paid in full by the customer.
Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities generally include trade payables, project-related accruals and
personnel-related costs. Accounts payable and accrued liabilities increased to $4.4 million at December 31,
2023 from $3.6 million from December 31, 2022, due to the timing of payments caused by contracting
delays.
Government Loans
The government loans balance decreased slightly to $0.4 million at December 31, 2023 from $0.5 million at
December 31, 2022 due to regular monthly payments. The loans were available to help off -set the impacts
of the COVID-19 pandemic and will be repaid.
Unearned Revenue
The unearned revenue balance at December 31, 2023 decreased to $2.6 million from $3.0 million at
December 31, 2022. This balance consists of payments received from customers for contracts that are
in progress and have not yet ful(cid:246) lled the necessary revenue recognition criteria. The decline in deferred
revenue re(cid:248) ects the volatility and timing of payments of higher quality revenue as a growing proportion
of accounts transition to multi-year contracts, where the Company has been successful negotiating higher
pricing and extended duration. At December 31, 2023, 91% of the total balance is related to software and
solutions license revenue (91% at December 31, 2022), in which the license fee is paid upfront for the term
of the license. The balance relates to the collection of milestone billings on acquisition services contracts
and data licenses.
8
2023 Annual Report | Management’s Discussion and Analysis
QUARTERLY FINANCIAL INFORMATION
Selected Quarterly Information
The following table sets forth selected quarterly (cid:246) nancial information for Intermap’s eight most recent (cid:246) scal
quarters. This information is unaudited, but re(cid:248) ects all adjustments of a normal, recurring nature that are,
in the opinion of management, necessary to present a fair statement of Intermap’s consolidated results of
operations for the periods presented. Quarter-to-quarter comparisons of Intermap’s (cid:246) nancial results are not
necessarily meaningful and should not be relied on as an indication of future performance.
For the last eight quarters, the Company has been severely undercapitalized and was therefore required to
self-(cid:246) nance the advancement of high-growth opportunities in the government vertical. As a result, revenue
has been delayed.
Quarterly Revenue
Consolidated revenue for the quarters ended December 31, 2023 and 2022 was $1.2 million for each
quarter. Approximately 65% of consolidated revenue was generated outside the United States, compared to
69% for 2022.
Acquisition Services
Acquisition services revenue for the quarter ended December 30, 2023 totaled $8 thousand, compared to
$22 thousand for the three-months ended December 31, 2022.
Value-added Data
Value-added data revenue increased to $0.3 million for the quarter ended December 31, 2023 as compared
to $0.2 million for the quarter ended December 31, 2022.
Software and Solutions
Software and solutions revenue increased to $1.2 million from $0.9 million for the quarter ended December
31, 2023 and 2022, respectively. The Company recognized a 8% increase in subscription-based revenue,
driven by growth in InsitePro license values.
Personnel
Personnel expense for the three-month periods ended December 31, 2023 and 2022 totaled $1.0 million
and $1.5 million, respectively. The decrease is salary savings during the last half of 2023.
Non-cash share-based compensation for the quarters ended December 31, 2023 and 2022, was $90
thousand and $98 thousand, respectively.
2023 Annual Report | Management’s Discussion and Analysis
9
Purchased Services and Materials
For the three-month periods ended December 31, 2023, and 2022, PS&M expense was $0.5 million for both
periods.
Facilities and Other Expenses
For the three-month period ended December 31, 2023 and 2022, facilities and other expenses decreased
slightly to $0.1 million from $0.2 million.
Travel
For the quarters ended December 31, 2023 and 2022, travel expense was $3 thousand and $20 thousand,
respectively.
USE OF PROCEEDS
e Company completed the following Private Placements with the proposed use of
proceeds for working capital to fund continuing operations.
The Company has cash of $0.7 million at December 31, 2023.
10
2023 Annual Report | Management’s Discussion and Analysis
CONTRACTUAL OBLIGATIONS
Contractual obligations include (i) lease obligations on offi ce locations and computer equipment; (ii) project
(cid:246) nancing; (iii) government loans; and (iv) operating leases on low value equipment. Principal and interest
repayments of these obligations are as follows:
LIQUIDITY AND CAPITAL RESOURCES
Management continually assesses liquidity in terms of the ability to generate suffi cient cash (cid:248) ow to fund
the business. Net cash (cid:248) ow is aff ected by the following items: (i) operating activities, including the level
of trade receivables, unbilled receivables, accounts payable, accrued liabilities and unearned revenue;
(ii) investing activities, including the purchase of property and equipment; and (iii) (cid:246) nancing activities,
including debt (cid:246) nancing and the issuance of capital stock.
Operating Activities
During the year ended December 31, 2023, the Company generated an operating loss of $3.3 and incurred
negative Adjusted EBITDA1 of $2.4 million. Revenue for the year ended December 31, 2023 was $6.2 million,
which is a $0.6 million decrease as compared to the same period in 2022. At December 31, 2023, the
Company has a shareholders’ de(cid:246) cit of $3.6 million.
Cash used in operations during the year ended December 31, 2023 totaled $0.6 million, compared to cash
used by operations of $1.5 million during the same period in 2022.
At December 31, 2023, $2.6 million of the current assets over current liabilities de(cid:246) ciency relates to
unearned revenue, which is the accounting treatment for contracts in which the revenue recognition
criteria have not been met at the time of payment. The Company has an obligation to deliver the required
services (software) over the term of the license, and there is no incremental cash cost or payment. During
the (cid:246) rst quarter of 2024, the Company began executing on a new acquisition services contract award
exceeding $15 million to be recognized over the next 12 to 15 months, along with signi(cid:246) cant commercial
pipeline, and as such, management expects to meet the obligations as they come due through operations.
Investing Activities
Net cash used in investing activities totaled $0.4 million and $0.2 million for the years ended December
31, 2023 and 2022, respectively. For both periods, the balance related to the purchase of computer related
equipment and the capitalization of labor and materials to build the data archive, processing capabilities,
and software assets in advance of anticipated contract awards.
Financing Activities
Net cash provided by (cid:246) nancing activities totaled $0.8 million for the year ended December 31, 2023, as
1 Adjusted EBITDA is a non-GAAP measure. See “Reconciliation of Non-GAAP Measures above”
2023 Annual Report | Management’s Discussion and Analysis
11
compared to net cash provided by (cid:246) nancing activities of $2.4 million in 2022. The net cash provided during
the year ended December 31, 2023 resulted from proceeds from private placements of $1.5 million, off set
by private placement issuance costs of $0.2 million, payment of lease obligations of $0.3 million, and
repayment of loans $0.2 million. The net cash provided during the year ended December 31, 2022 resulted
from proceeds from private placements of $2.9 million, off set by private placement issuance costs of $0.2
million and the payment of lease obligations of $0.3 million.
The Company is dependent upon its cash (cid:248) ow from operations to fund its business as it currently has no
line of credit or credit facility in place.
The Company’s ability to continue as a going concern is dependent on management’s ability to successfully
secure sales with upfront payments, execute on the new foreign government contract award, and / or
obtain additional (cid:246) nancing. Failure to achieve one or more of these requirements could have a materially
adverse eff ect on the Company’s (cid:246) nancial condition and / or results of operations. The Board of Directors
and management continue to take actions to address these issues including exploring options for
additional capital and securing subscription-based contracts which will increase revenue in future periods
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Revenue Recognition
Revenue is recognized when a customer obtains control of the good or services. Determining the timing of
the transfer of control, at a point in time or overtime, requires judgement.
Acquisition Service Contracts
Revenue from acquisition service contracts is recognized over time based on the ratio of costs incurred to
estimated total contract costs. The use of this method of measuring progress towards complete satisfaction
of the performance obligations 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. Invoices are issued according to contractual terms
and are usually payable within 30 days. Revenue recognized in advance of billings are presented as unbilled
revenue.
Data Licenses
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. Customers obtain control of data products upon receipt of a
physical hard drive or download of the data from a web link provided. Invoices are generated, and revenue
is recognized at that point in time. Invoices are generally paid within 30 days.
Software Subscriptions
Software subscriptions are paid at the beginning of the license term. Revenue is recognized overtime, and
payments for future months of service are recognized in unearned revenue. While the license agreements
are for a (cid:246) xed term, some agreements also contain a limited number of clicks or uses. If the limit is reached
prior to the end of the term, the license ends early.
Use of Estimates
Preparing (cid:246) nancial statements in conformity with IFRS requires management to make judgments, estimates
and assumptions that aff ect the application of accounting policies and reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the (cid:246) nancial statements, and the
reported amounts of revenue and expenses during the period. Actual results could diff er from these
estimates.
12
2023 Annual Report | Management’s Discussion and Analysis
Information about assumptions and estimation uncertainties that have a signi(cid:246) cant risk of resulting in a
material adjustment within the next (cid:246) nancial 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 speci(cid:246) c account assessments when determining the
expected credit losses. These accounting estimates are in respect to the amounts receivable line item in
the Company’s consolidated statements of (cid:246) nancial position. At December 31, 2023, amounts receivable
represented 7% of total assets.
The estimate of the Company’s expected credit losses could change from period to period due to the
allowance being a function of the balance and composition of trade receivables. At December 31, 2023, the
expected credit losses of trade receivables were $Nil due to only $27 thousand in receivables were aged
over 61 days past due.
Investments
The valuation and accounting for investments requires the application of management estimates and
judgments with respect to the determination of appropriate valuation method applied at each reporting
date. The assumptions for estimating fair value of investments are disclosed in Note 8 to the Consolidated
Financial Statements.
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 aff ect the amounts recognized in the consolidated (cid:246) nancial statements.
Revenue
Revenue from acquisition service contracts is recognized over time based on the ratio of costs incurred to
estimated total contract costs. The determination of estimated total contract costs of acquisition services
contracts requires the use of signi(cid:246) cant assumptions related to estimated purchased services, materials,
and labor costs. Changes to the assumptions used to measure revenue could impact the amount of revenue
recognized in the Consolidated Financial Statements.
Impairment
The carrying value of long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that their carrying amounts may not be recoverable and assesses the impairment
for intangible assets not yet available for use on an annual basis. The Company has determined that its
long-lived assets belong to two distinct cash-generating units (CGUs). The signi(cid:246) cant assumptions used
in determining estimated discounted future cash (cid:248) ows include projected revenues and discount rates.
Judgment is required in determining the level at which to test impairment, including the grouping of CGUs
that generate cash in(cid:248) ows.
OFFBALANCE SHEET ARRANGEMENTS
As at April 1, 2024 and December 31, 2023, the Company did not have any material off -balance sheet
arrangements.
2023 Annual Report | Management’s Discussion and Analysis
13
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 April 1, 2024, 41,977,490 Class A common shares were issued and outstanding. There are
currently no Class A participating preferred shares issued and outstanding.
As of April 1, 2024, potential dilutive securities include (i) 794,443 outstanding share options with a
weighted average exercise price of C$0.72, (ii) 3,679,623 restricted share units, and (iii) 7,397,245 warrants
outstanding with a weighted average exercise price of US$0.53. Each option and warrant entitles the holder
to purchase one Class A common share. The following warrants expire on the dates listed below:
•
•
•
•
•
•
•
•
3,148,900 warrants expire on November 15, 2024;
115,000 warrants expire on December 6, 2024;
858,600 warrants expire on August 9, 2025;
602,500 warrants expire on August 15, 2025;
84,545 warrants expire on September 4, 2025;
736,700 warrants expire on October 19, 2025;
1,731,000 warrants expire on December 20, 2025; and
120,000 warrants expire on January 3, 2026.
Other than as listed above, the Company does not currently have any material (cid:246) nancial instruments which
can be converted into additional common shares.
INTERNAL CONTROLS AND DISCLOSURE CONTROLS AND PROCEDURES
Internal Control Over Financial Reporting
The Company’s Chairman and Chief Executive Offi cer and the Company’s Chief Financial Offi cer have
designed, or have caused to be designed under their supervision, internal control over (cid:246) nancial reporting
as de(cid:246) ned under National Instrument 52-109 – Certi(cid:246) cation of Disclosure in Issuer’s Annual and Interim
Filings, to provide reasonable assurance regarding the reliability of (cid:246) nancial reporting and the preparation
of (cid:246) nancial statements for external purposes in accordance with IFRS. The Company’s Chairman and Chief
Executive Offi cer and the Company’s Chief Financial Offi cer have evaluated, or caused to be evaluated
under their supervision, the eff ectiveness of the Company’s internal control over (cid:246) nancial 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 (cid:246) nancial reporting
were eff ective at December 31, 2023.
Changes in Internal Control Over Financial Reporting
There have been no signi(cid:246) cant changes in the design of internal control over (cid:246) nancial reporting that
occurred during the year ended December 31, 2023 that has materially aff ected, or is reasonably likely to
materially aff ect, the Company’s internal control over (cid:246) nancial reporting.
Disclosure Controls and Procedures
The Company’s Chairman and Chief Executive Offi cer and the Company’s Chief Financial Offi cer 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 (cid:246) lings, interim (cid:246) lings or other
reports (cid:246) led by it or submitted by it under securities legislation is recorded, processed, summarized and
reported within the time periods speci(cid:246) ed by applicable securities legislation. The Company’s Chairman and
14
2023 Annual Report | Management’s Discussion and Analysis
Chief Executive Offi cer and the Company’s Chief Financial Offi cer have evaluated, or caused to be evaluated
under their supervision, the eff ectiveness of the Company’s disclosure controls and procedures and have
determined, based on that evaluation, that such disclosure controls and procedures were eff ective at
December 31, 2023.
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 (cid:246) nancial
condition of the Company could be materially adversely aff ected.
Negative Cash Flow from Operating Activities
The Company did not achieve positive operating cash (cid:248) ow in its most recently completed (cid:246) nancial year.
Accordingly, the Company may experience negative cash (cid:248) ow from operations in the future. The Company
has incurred net losses in the past and may incur losses in the future unless it can derive suffi cient revenues
from its business. Such future losses could have an adverse eff ect on the market price of the Securities,
which could cause investors to lose part or all of their investment.
Cash Flow and Liquidity Uncertainty
The Company is dependent upon its cash (cid:248) ow from operations to fund its business because it has no line
of credit or credit facility currently in place. As of December 31, 2023, the Company had cash on hand
of $0.7 million, current assets of $1.3 million and current liabilities of $7.4 million, resulting in a working
capital de(cid:246) ciency of $6.1 million. Given the Company’s cash balance, together with the acquisition services
contract award announced in the (cid:246) rst quarter of 2024, its potential sources of funding and working capital
needs, the Company believes it has suffi cient cash to fund its operations for the next 12 months. This
expectation re(cid:248) ects certain assumptions of management, including, among other things, growth estimates
in respect of the Company’s revenues based on the Company’s ability to successfully secure sales with
upfront payments, and anticipated levels of capital expenditures and other costs expected to be incurred
over the next 12 months. If these assumptions prove to be incorrect and the Company generates negative
operating cash (cid:248) ows in a future period, the Company may need to obtain alternative sources of funding.
However, there can be no assurance that additional funding will be available or, if available, that it will be
available on acceptable terms. If adequate funds are not available, the Company may have to substantially
reduce or otherwise eliminate certain expenditures, which could have a material adverse eff ect on the
Company’s operations and (cid:246) nancial condition. There can be no assurance that the Company will be able to
raise additional capital if its capital resources are depleted or exhausted.
Availability of Capital
Cash generated from its operations may not be enough to satisfy its current liquidity requirements. As such,
the Company will require additional capital. The extent of the Company’s future capital requirements will
depend on many factors, including, but not limited to, the market acceptance of its products and services,
demand for geospatial related products and service, and competition within this industry. 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.
Revenue Fluctuations
Intermap’s revenue has (cid:248) uctuated over the years. Acquisition services projects, the purchase of value-
added data, and the purchase of software and solutions by the Company’s customers are all scheduled per
customer requirements and the timing of regulatory and/or budgetary decisions. The commencement or
completion of acquisition projects within a particular quarter or year, the timing of regulatory approvals,
operating decisions of clients, and the (cid:246) xed-cost nature of Intermap’s business, among other factors, may
2023 Annual Report | Management’s Discussion and Analysis
15
cause the Company’s results to vary signi(cid:246) cantly between (cid:246) scal years and between quarters in the same
(cid:246) scal year.
Nature of Government Contracts
Intermap conducts a signi(cid:246) cant 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 eff ect on Intermap’s revenue, earnings, and cash (cid:248) ow.
Foreign Operations
A signi(cid:246) cant 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 (cid:248) uctuations,
agreements that may be diffi cult to enforce, receivables diffi cult to collect through a foreign country’s legal
system, and the imposition of foreign-country-imposed withholding taxes or other foreign taxes.
Dilution
The Company may issue additional securities, which may dilute existing securityholders.
Key Customers
During 2023, the Company had four key customers that accounted for 28% of total revenue. During 2022,
16% of the revenue was attributable to one key customer. To the extent that signi(cid:246) cant customers cancel or
delay orders, Intermap’s revenue, earnings, and cash (cid:248) ow could be materially and adversely aff ected.
Executive Talent
Intermap is focused on aligning its resources with its acquisition services, value-added data and software
and solutions revenue opportunities. This realignment requires the retention of executive talent. The
Company will continue to invest in training and leadership development to retain talent.
Competing Technologies
With respect to the Company’s software applications, several direct and indirect competitors are currently
in the market with product off erings that could be considered at least partially competitive to Intermap’s
products. These potential competitors vary in size and could have greater technical and/or (cid:246) nancial
resources than the Company, to develop and market their products. The (cid:246) nancial performance of the
Company may be adversely aff ected by such competition.
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 signi(cid:246) cant 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 diff erent 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 seen incremental, evolutionary improvement over
time. 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 signi(cid:246) cant competing technology.
16
2023 Annual Report | Management’s Discussion and Analysis
Any required additional (cid:246) nancing needed by the Company to remain competitive with these other
technologies may not be available or, if available, may not be on terms satisfactory to the Company.
Common Share Price Volatility
The market price of the Company’s common shares has (cid:248) uctuated widely in recent periods and is likely
to continue to be volatile. A number of factors can aff ect the market price of Intermap’s common stock
including (i) actual or anticipated variations in operating results, (ii) the low daily trading volume of the
Company’s stock, (iii) announcement of technological innovations or new products by the Company or its
competitors, (iv) competition, including pricing pressures and the potential impact of competitors products
on sales, (v) changing conditions in the geospatial and related industries, (vi) unexpected production
diffi culties, (vii) changes in (cid:246) nancial estimates or recommendations by stock market analysts regarding
Intermap or its competitors, (viii) announcements by Intermap or its competitors of acquisitions, strategic
partnerships, or joint ventures, (ix) additions or departures of senior offi cers, (x) changes in economic or
political conditions (xi) the selling of signi(cid:246) cant holdings by large investors, and (xii) the Company’s ability
to meet the continued listing requirements of the Toronto Stock Exchange to maintain the listing of its
common shares.
Loss of Proprietary Information
Intermap currently holds patents on the technology used in its operations and relies heavily 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 con(cid:246) dential, no assurance can be given that the steps taken by Intermap will be eff ective 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 con(cid:246) dentiality obligations, or that third
parties, in time, could not independently develop and deploy equivalent or superior technologies.
Software Functionality
Defects in the Company’s software applications, delays in delivery, and failures or mistakes in the Company’s
software code could materially harm the Company’s business, including customer relationships and
operating results.
Internet and System Infrastructure Functionality
The end customers of the Company’s software applications depend on internet service providers, online
service providers and the Company’s infrastructure for access to the software applications the Company
provides to its customers. These services are subject to service outages and delays due to system failures,
stability or interruption. As a result, the Company may not be able to meet a satisfactory level of service
as agreed to with its customers, which could have a material adverse eff ect on the Company’s business,
revenues, operating results and (cid:246) nancial condition.
Information Technology Security
The Company’s software applications are dependent on its ability to protect its computer equipment
and the information stored in its data centers against damage that may be caused by (cid:246) re, power loss,
telecommunication failures, unauthorized intrusion, computer viruses, disabling devices and other similar
events. A failure in the Company’s production systems or a disaster or other event aff ecting production
systems or business operations, both internally and externally, could result in a disruption to the Company’s
software services. Such a disruption could also impact the Company’s reputation and cause it to lose
customers, revenue, face litigation, or necessitate customer service/repair work that would involve
substantial costs and could ultimately have a material impact on the Company.
Intermap’s geospatial database is a valuable asset to the Company. While Intermap has invested in database
management, information technology security, (cid:246) rewalls, and off site duplicate storage, there is a risk of a loss
2023 Annual Report | Management’s Discussion and Analysis
17
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.
Cybersecurity
The Company’s software applications and geospatial database are dependent upon protection against
damage or loss that may be caused by a cyberattack. Loss or theft of the Company’s geospatial database
could result in lost revenue or the ability of a competitor to provide competing software solutions. A hostile
Denial of Service (DoS) action could disrupt the Company’s software services. Such a disruption could
impact the Company’s reputation and cause it to lose customers, revenue, face litigation, or necessitate
customer service/repair work that would involve substantial costs and could ultimately have a material
impact on the Company.
Intermap has invested in database management, information technology security, and (cid:246) rewalls to mitigate
the risk of loss or theft of the Company’s data. Further investments have been made to prevent DoS
activities and improvements to the software services’ defenses against such attacks.
The Company undertakes periodic reviews of its information technology infrastructure and security policies
using the SANS CIS Critical Security Controls as a framework. The areas of focus for review pertain to user
and system authentication and access; internal network con(cid:246) guration and security; data storage resiliency
and security; and hosted application access security. These periodic reviews serve to proactively shore up
areas of vulnerability and ensure policies are eff ective and enforced. However, the risk cannot be eliminated
entirely, and the Company has invested in insurance to mitigate loss in the event of a cyberattack.
Exporting Products – Political Considerations
Intermap’s data collection systems contain technology that is classi(cid:246) ed as a defense article under the
International Traffi c and Arms Regulations. All mapping eff orts undertaken outside the United States,
therefore, constitute a temporary export of a defense article, requiring prior written approval by the United
States Department of State for each country within which mapping operations are to be performed. The
Company does not currently anticipate that requirements for export permits will have a material impact on
the Company’s operations, although either government policy or government relations with select foreign
countries may change to the point of aff ecting the Company’s operational opportunities.
Environmental Regulation
Changes in environmental regulation could have an adverse eff ect on the Company’s airborne data
acquisition services business. For example, requirements for cleaner burning aircraft fuel could result in
increased costs which could impact the Company’s pricing model for acquisition services projects. The
complexity and breadth of environmental and climate change related issues make it extremely diffi cult to
predict the potential impact on the Company. Compliance with environmental regulation can be costly,
and non-compliance can result in (cid:246) nes, penalties and loss of licenses.
Political Instability
Political or signi(cid:246) cant 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 aff ect the prospects of the Company.
18
2023 Annual Report | Management’s Discussion and Analysis
Aircraft / Radar Lost or Damaged
Although the Company believes that the probability of one of the Company’s aircraft or radar sustaining
signi(cid:246) cant 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 are helpful, but not required, in the collection of the
Company’s IFSAR 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
pro(cid:246) ting from free information, there is risk it could seek compensation.
Force Majeure
The Company’s projects may be adversely aff ected by risks outside the control of the Company including
labor unrest, civil disorder, war, subversive activities or sabotage, (cid:246) res, (cid:248) oods, explosions or other
catastrophes, epidemics, or quarantine restrictions.
Additional Information
Additional risk factors may be detailed in the Company’s Annual Information Form, which can be found on
the Company’s Web site at www.intermap.com and on SEDAR at www.sedar.com.
Management’s Report
19
The accompanying (cid:246) nancial statements of Intermap Technologies Corporation and all the information
in this annual report are the responsibility of the Company‘s management. The consolidated (cid:246) nancial
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 (cid:246) nancial information presented elsewhere in this annual
report and has ensured that it is consistent with the (cid:246) nancial statements.
Management maintains appropriate systems of internal control that provide reasonable assurance that
assets are adequately safeguarded and that the (cid:246) nancial reports are suffi ciently well-maintained for the
timely preparation of the consolidated (cid:246) nancial 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 (cid:246) nancial statements of the Company, which are contained in this report.
Patrick A. Blott
Chairman of the Board and
Chief Executive Offi cer
Jennifer S. Bakken
Executive Vice President and
Chief Financial Offi cer
20
Independent Auditors’ Report
21
TO THE SHAREHOLDERS OF INTERMAP TECHNOLOGIES CORPORATION
Opinion
We have audited the consolidated (cid:246) nancial statements of Intermap Technologies Corporation (the Entity),
which comprise:
•
•
•
•
•
the consolidated statements of (cid:246) nancial position as at December 31, 2023 and December 31, 2022
the consolidated statements of loss and other comprehensive loss for the years then ended
the consolidated statements of changes in shareholders’ de(cid:246) ciency for the years then ended
the consolidated statements of cash (cid:248) ows for the years then ended
and notes to the consolidated (cid:246) nancial statements, including a summary of material accounting policy
information
(Hereinafter referred to as the “(cid:246) nancial statements”).
In our opinion, the accompanying (cid:246) nancial statements present fairly, in all material respects, the
consolidated (cid:246) nancial position of the Entity as at December 31, 2023 and December 31, 2022, and its
consolidated (cid:246) nancial performance and its consolidated cash (cid:248) ows for the years then ended in accordance
with IFRS Accounting Standards.
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of
the Financial Statements” section of our auditor’s report.
We are independent of the Entity in accordance with the ethical requirements that are relevant to our audit
of the (cid:246) nancial statements in Canada and we have ful(cid:246) lled our other ethical responsibilities in accordance
with these requirements.
We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our
opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 2(a) in the (cid:246) nancial statements, which indicates that Intermap Technologies
Corporation has incurred recurring operating losses in current and prior years, negative cash (cid:248) ows from
operating activities in the current and prior years, has negative working capital (current assets less current
liabilities) and a shareholders’ de(cid:246) cit at December 31, 2023.
As stated in Note 2(a) in the (cid:246) nancial statements, these events or conditions, along with other matters as
set forth in Note 2(a) in the (cid:246) nancial statements, indicate that a material uncertainty exists that may cast
signi(cid:246) cant doubt on the Entity’s ability to continue as a going concern.
Our opinion is not modi(cid:246) ed in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most signi(cid:246) cance in our
audit of the (cid:246) nancial statements for the year ended December 31, 2023. These matters were addressed in
the context of our audit of the (cid:246) nancial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
In addition to the matter described in the “Material Uncertainty related to Going Concern” section of
the auditor’s report, we have determined the matter described below to be the key audit matter to be
communicated in our auditor’s report.
22
Independent Auditors’ Report
Evaluation of the fair value of the investment in a privately held company
Description of the matter
We draw attention to Notes 2(d)(iii), 3(f) and 8 of the (cid:246) nancial statements. At December 31, 2023, the Entity
had an investment in a privately held company (“investment”) which was valued at $849 thousand over
which the Entity exercises no control or signi(cid:246) cant in(cid:248) uence. The investment is carried at fair value, with the
change recognized in pro(cid:246) t or loss. The fair value of the investment at December 31, 2023 was estimated
using a market-based approach with primarily unobservable inputs, including the comparable enterprise
value to revenue multiples discounted for considerations such as the lack of marketability and other
diff erences between the comparable peer group and the privately held company.
Why the matter is a key audit matter
We identi(cid:246) ed the evaluation of the fair value of the investment in a privately held company as a key audit
matter. This matter represented a signi(cid:246) cant risk of material misstatement given the magnitude of the
investment. In addition, signi(cid:246) cant auditor judgment and specialized skills and knowledge were required in
evaluating the results of our audit procedures regarding the Entity’s unobservable inputs identi(cid:246) ed above.
How the matter was addressed in the audit
The primary procedures we performed to address this key audit matter included the following:
We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating
the appropriateness of the comparable enterprise value to revenue multiples (“multiples”) discounted
for considerations such as the lack of marketability and other diff erences between the comparable peer
group and the privately held company. The multiples were evaluated by comparing them to independently
developed multiples using publicly available market data, adjusted for the lack of marketability of the
privately held company and other considerations.
With the assistance of our valuation professionals, we developed an independent range of estimates of the
fair value and compared our estimates to management’s estimate.
Other Information
Management is responsible for the other information. Other information comprises:
•
•
the information included in Management’s Discussion and Analysis (cid:246) led with the relevant Canadian
Securities Commissions.
the information, other than the (cid:246) nancial statements and the auditor’s report thereon, included in a
document likely to be entitled “2023 Annual Report”.
Our opinion on the (cid:246) nancial statements does not cover the other information and we do not and will not
express any form of assurance conclusion thereon.
In connection with our audit of the (cid:246) nancial statements, our responsibility is to read the other information
identi(cid:246) ed above and, in doing so, consider whether the other information is materially inconsistent with the
(cid:246) nancial statements or our knowledge obtained in the audit and remain alert for indications that the other
information appears to be materially misstated.
We obtained the information included in Management’s Discussion and Analysis (cid:246) led with the relevant
Canadian Securities Commissions as at the date of this auditor’s report. If, based on the work we have
performed on this other information, we conclude that there is a material misstatement of this other
information, we are required to report that fact in the auditor’s report.
We have nothing to report in this regard.
The information, other than the (cid:246) nancial statements and the auditor’s report thereon, included in a
document likely to be entitled “2023 Annual Report” is expected to be made available to us after the date of
Independent Auditors’ Report
23
this auditor’s report. If, based on the work we will perform on this other information, we conclude that there
is a material misstatement of this other information, we are required to report that fact to those charged
with governance.
Responsibilities of Management and Those Charged with Governance for the
Financial Statements
Management is responsible for the preparation and fair presentation of the (cid:246) nancial statements in
accordance with IFRS Accounting Standards, and for such internal control as management determines
is necessary to enable the preparation of (cid:246) nancial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the (cid:246) nancial statements, management is responsible for assessing the Entity’s ability to
continue as a going concern, disclosing as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Entity or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Entity’s (cid:246) nancial reporting process.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the (cid:246) nancial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with Canadian generally accepted auditing standards will always detect a material
misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to in(cid:248) uence the economic decisions of users taken on the basis of the
(cid:246) nancial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit.
We also:
•
•
•
•
Identify and assess the risks of material misstatement of the (cid:246) nancial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is suffi cient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
eff ectiveness of the Entity’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast signi(cid:246) cant doubt on the Entity’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the (cid:246) nancial statements or, if such disclosures are inadequate, to modify
24
Independent Auditors’ Report
•
•
•
•
•
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Entity to cease to continue as a going
concern.
Evaluate the overall presentation, structure and content of the (cid:246) nancial statements, including the
disclosures, and whether the (cid:246) nancial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
Communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and signi(cid:246) cant audit (cid:246) ndings, including any signi(cid:246) cant de(cid:246) ciencies in
internal control that we identify during our audit.
Provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
Obtain suffi cient appropriate audit evidence regarding the (cid:246) nancial information of the entities or
business activities within the group Entity to express an opinion on the (cid:246) nancial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
Determine, from the other matters communicated with those charged with governance, those
matters that were of most signi(cid:246) cance in the audit of the (cid:246) nancial statements of the current period
and are therefore the key audit matters. We describe these matters in our auditor’s report unless law
or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our auditor’s report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest bene(cid:246) ts of
such communication.
Chartered Professional Accountants, Licensed Public Accountants
The engagement partner on the audit resulting in this auditor’s report is Alexandra Duret.
Ottawa, Canada
April 2, 2024
25
26
Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In thousands of United States dollars)
See accompanying notes to consolidated (cid:246) nancial statements.
On behalf of the Board:
(Signed) Patrick A. Blott
Patrick A. Blott
Chairman and CEO
On behalf of the Board:
(Signed) Phillippe Frappier
Phillippe Frappier
Independent Director
2023 Annual Report | Consolidated Financial Statements
27
CONSOLIDATED STATEMENTS OF LOSS INCOME AND OTHER COMPREHENSIVE
LOSS
(In thousands of United States dollars, except per share information)
See accompanying notes to consolidated (cid:246) nancial statements.
28
2023 Annual Report | Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIENCY
(In thousands of United States dollars)
Share Capital Warrants
Contributed
Surplus
Accumulated
Other
Comprehensive
Loss
Deficit
Total
Balance at December 31, 2021
$
206,102
$
232
$
26,144
$
(129)
$
(231,497)
$
852
Comprehensive loss for the period
Share-based compensation
Private placement proceeds (Note 14(b))
Issuance costs
Expiry of warrants
-
-
2,588
(284)
-
-
-
294
60
(93)
-
366
-
-
93
(12)
-
-
-
-
(5,283)
-
-
-
-
(5,295)
366
2,882
(224)
-
Balance at December 31, 2022
$
208,406
$
493
$
26,603
$
(141)
$
(236,780)
$
(1,419)
Comprehensive loss for the period
Share-based compensation
Private placement proceeds (Note 14(b))
Issuance costs
Expiry of warrants
-
-
1,115
(225)
-
-
-
404
32
(138)
-
244
-
-
138
(15)
-
-
-
-
(3,701)
-
-
-
-
(3,716)
244
1,519
(193)
-
Balance at December 31, 2023
$
209,296
$
791
$
26,985
$
(156)
$
(240,481)
$
(3,565)
See accompanying notes to consolidated (cid:246) nancial statements.
2023 Annual Report | Consolidated Financial Statements
29
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of United States dollars)
See accompanying notes to consolidated (cid:246) nancial statements.
30
Notes to Consolidated Financial Statements
(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 offi ce of Intermap is located at 385 Inverness Parkway, Suite 105, Englewood, Colorado, USA
80112. Its registered offi ce is located at 400, 3rd Avenue SW, Suite 3700, Calgary, Alberta, Canada T2P
4H2.
Intermap is a global location-based geospatial intelligence company, creating a wide variety of
geospatial solutions and analytics for its customers. Intermap’s geospatial solutions and analytics
can be used in a wide range of applications including, but not limited to, location-based information,
geospatial risk assessment, geographic information systems, engineering, utilities, global positioning
systems maps, oil and gas, renewable energy, hydrology, environmental planning, wireless
communications, transportation, advertising, and 3D visualization.
2. Basis of preparation:
a. Going concern:
These consolidated (cid:246) nancial 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 can realize its assets and discharge its liabilities and
commitments in the normal course of business. During the year ended December 31, 2023, the
Company reported an operating loss of $3,346, net loss of $3,701, and negative cash (cid:248) ows from
operating activities of $602. In addition, the Company has a shareholders’ de(cid:246) cit of $3,565 and
negative working capital of $6,114 (current assets less current liabilities) at December 31, 2023.
The above factors in the aggregate indicate there are material uncertainties which may cast signi(cid:246) cant
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, and / or obtain additional (cid:246) nancing. There can be no assurance that such plans will be
achieved. Failure to achieve one or more of these requirements could have a materially adverse
eff ect on the Company’s (cid:246) nancial condition and / or results of operations. The Board of Directors
and management continue to take actions to address these issues including exploring options for
additional capital, securing subscription-based contracts which will increase revenue in future periods
and securing a material government contract award that will begin to be recognized during the (cid:246) rst
quarter of 2024.
The consolidated (cid:246) nancial statements do not re(cid:248) ect adjustments that would be necessary if the
going concern assumption was not appropriate. If the going concern basis was not appropriate for
these consolidated (cid:246) nancial statements, then adjustments would be necessary to the carrying value
of assets and liabilities, the reported revenues and expenses, and the statement of (cid:246) nancial position
classi(cid:246) cations used.
b. Statement of compliance:
These consolidated (cid:246) nancial statements have been prepared in accordance with IFRS Accounting
Standards. The signi(cid:246) cant account policies are summarized in Note 3.
The policies applied in these consolidated (cid:246) nancial statements are based on IFRS Accounting
Standards issued and eff ective for the Company’s (cid:246) scal year end December 31, 2023. The Board of
Directors approved the consolidated (cid:246) nancial statements on April 1, 2024.
c. Measurement basis:
The consolidated (cid:246) nancial statements have been prepared mainly on the historical cost basis. Other
measurement bases used are described in the applicable notes.
2023 Annual Report | Consolidated Financial Statements
31
d. Use of estimates:
Preparing consolidated (cid:246) nancial statements in conformity with IFRS Accounting Standards requires
management to make judgments, estimates and assumptions that aff ect the application of accounting
policies and reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at
the date of the consolidated (cid:246) nancial statements, and the reported amounts of revenue and expenses
during the period. Actual results could diff er 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
aff ected.
Information about assumptions and estimation uncertainties that have a signi(cid:246) cant risk of resulting in
a material adjustment within the next (cid:246) nancial 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.
ii. Trade receivables:
The Company uses historical trends and performs speci(cid:246) c account assessments when
determining the expected credit losses. These accounting estimates are in respect to the trade
receivables line item in the Company’s consolidated statements of (cid:246) nancial position. At December
31, 2023, trade receivables represented 7% of total assets.
The estimate of the Company’s expected credit losses could change from period to period due to
the allowance being a function of the balance and composition of trade receivables.
iii.
Investments:
The valuation and accounting for the Company’s investment in a privately held company requires
the application of management estimates and judgments with respect to the determination of
appropriate valuation method applied at each reporting date. The assumptions for estimating fair
value of the investment are disclosed in Note 8.
iv. Share-based compensation:
The Company uses the Black-Scholes option-pricing model to determine the grant date fair value
of share-based compensation. The following assumptions are used in the model: dividend yield;
expected volatility; risk-free interest rate; expected option life; and fair value.
Changes to assumptions used to determine the grant date fair value of share-based compensation
awards can aff ect the amounts recognized in the consolidated (cid:246) nancial statements.
v. Revenue:
Revenue from acquisition service contracts, which are (cid:246) xed-price contracts, is recognized over
time based on the ratio of costs incurred to estimated total contract costs. The determination
of estimated total contract costs of acquisition services contracts requires the use of signi(cid:246) cant
assumptions related to estimated purchased services, materials, and labor costs. Changes to the
assumptions used to measure revenue could impact the amount of revenue recognized in the
consolidated (cid:246) nancial statements (see Note 3(k)).
vi.
Impairment:
The carrying value of long-lived assets are reviewed for impairment whenever events or changes
in circumstances indicate that their carrying amounts may not be recoverable and assesses the
impairment for intangible assets not yet available for use on an annual basis. The Company has
determined that its long-lived assets belong to two distinct cash-generating units (“CGUs”). The
Company determines the value in use based on estimated discounted future cash (cid:248) ows and an
32
2023 Annual Report | Consolidated Financial Statements
impairment is recognized if the carrying value exceeds that estimate. The signi(cid:246) cant assumptions
used in determining estimated discounted future cash (cid:248) ows include projected revenues and
discount rates. Judgment is required in determining the level at which to test impairment,
including the grouping of CGUs that generate cash in(cid:248) ows (see Note 3(j)).
e. Functional and presentation currency:
These consolidated (cid:246) nancial statements are presented in United States dollars, which is the Company’s
functional currency. All (cid:246) nancial information presented in United States dollars has been rounded to
the nearest thousand.
f.
Foreign currency translation:
Items included in the (cid:246) nancial statements of each of the Company’s subsidiaries are measured using
the currency of the primary economic environment in which the entity operates (the functional
currency). Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transaction. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation of monetary assets and liabilities not
denominated in the functional currency of an entity are recognized in net loss for the period.
Assets and liabilities of entities with functional currencies other than United States dollars are
translated at the period end rates of exchange, and the results of their operations are translated
at exchange rates prevailing at the dates of transactions. The resulting translation adjustments are
included in accumulated other comprehensive income in shareholders’ de(cid:246) ciency.
3. Summary of material accounting policies:
a. Consolidation:
The accompanying consolidated (cid:246) nancial statements include the accounts of the Company and
its wholly owned subsidiaries, Intermap Technologies Inc. (a U.S. corporation); Intermap Insurance
Solutions Inc. (a U.S. corporation), Intermap Technologies PTY Ltd (an Australian corporation); Intermap
Technologies s.r.o. (a Czech Republic corporation); and PT ExsaMap Asia (an Indonesian corporation).
Inter-company balances and transactions, and any unrealized income and expenses arising from intra-
group transactions, are eliminated in preparing the consolidated (cid:246) nancial statements. The accounting
policies of all subsidiaries are consistent with the Company’s policies.
b. Cash:
Cash includes unrestricted cash balances.
c. 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
is capitalized and depreciated over the period until the next overhaul. When parts of an item of
property and equipment have diff erent useful lives, they are accounted for as separate items.
Depreciation is calculated over the depreciable amount, which is the cost of an asset, less its residual
value. Depreciation is provided on the straight-line basis over the following useful lives of the assets:
2023 Annual Report | Consolidated Financial Statements
33
Depreciation methods, useful lives and residual values are reviewed at each (cid:246) nancial year end and
adjusted, if appropriate.
Assets under construction are not depreciated until available for use by the Company. Expenditures for
maintenance and repairs are expensed when incurred.
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 bene(cid:246) ts embodied within the part will (cid:248) ow to
the Company, and its cost can be measured reliably. The carrying amount of the replaced part is
derecognized. The costs of the day-to-day servicing of property and equipment are recognized in pro(cid:246) t
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.
d.
Intangible assets:
Intangible assets include data library products the Company builds with the use of proprietary
software and intellectual property for use in software subscription sales and data license sales.
Intangible assets are measured at cost less accumulated amortization, and they are amortized over a
straight-line basis of (cid:246) ve years. The amortization method, estimate of the useful life, and residual values
of intangible assets are reviewed annually.
e. 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 speci(cid:246) ed criteria for deferral and amortization.
f.
Investments:
Investments include the common and preferred shares of a privately held company over which the
Company exercises no control or signi(cid:246) cant in(cid:248) uence. The investment is carried at fair value, with the
change recognized in pro(cid:246) t or loss.
g. Leases:
At inception of a contract, the Company assesses the right to control the use of an identi(cid:246) ed asset for
a period of time in exchange for consideration to determine if the contract is a lease. The Company
recognizes a right of use asset and a lease liability at the lease commencement date. The right of
use asset is initially measured based on the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or
the site on which it is located, less any lease incentives received. The asset is depreciated to the earlier
of the end of the useful life or the lease term using the straight-line method. The lease term includes
periods covered by an option to extend if the Company is reasonably certain to use that option. Lease
terms range from two to (cid:246) ve years for offi ces and data facilities. The right of use asset is periodically
reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be
determined, the Company’s incremental borrowing rate. Variable lease payments that do not depend
on an index or rate are not included in the measurement of the lease liability. The lease liability is
measured at amortized cost using the eff ective interest method. It is remeasured when there is a
change in the future lease payments, if there is a change in the Company’s estimated amount expected
to be paid, or if the Company changes its assessment of if it will exercise a purchase, extension, or
termination option. When the lease liability is remeasured in this way, a corresponding adjustment
34
2023 Annual Report | Consolidated Financial Statements
is made to the carrying amount of the right-of-use asset or is recorded in pro(cid:246) t or loss if the carrying
amount of the right-of-use asset has been reduced to zero.
The Company has elected to apply the practical expedient not to recognize right of use assets and
lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value
assets. The lease payments associated with these leases is recognized as an expense on a straight-line
basis over the lease term.
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 out(cid:248) ow of economic bene(cid:246) ts will
be required to settle the obligation. Provisions are determined by discounting the expected future cash
(cid:248) ows at a pre-tax rate that re(cid:248) ects the current market assessments of the time value of money and the
risks speci(cid:246) c to the liability. The unwinding of the discount is recognized as (cid:246) nance cost.
i. Onerous contracts:
A provision for onerous contracts is recognized when the expected bene(cid:246) ts 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.
Income taxes:
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in
pro(cid:246) t 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 diff erences between the carrying amounts of
assets and liabilities for (cid:246) nancial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognized for the following temporary diff erences: the initial recognition of assets
or liabilities in a transaction that is not a business combination and that aff ects neither accounting
nor taxable pro(cid:246) t or loss, and diff erences 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 diff erences arising on the initial recognition
of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary
diff erences when they reverse, based on the laws that have been enacted or substantively enacted by
the reporting date. Deferred tax assets and liabilities are off set if there is a legally enforceable right to
off set current tax liabilities and assets, and they relate to income taxes levied by the same tax authority
on the same taxable entity, or on diff erent 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 diff erences, to the
extent that it is probable that future taxable pro(cid:246) ts 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 bene(cid:246) t will be realized.
j.
Impairment:
The carrying values of all long-lived assets, including property and equipment, intangible assets, and
right of use assets are reviewed for impairment whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable. Intangible assets that are not yet available for
2023 Annual Report | Consolidated Financial Statements
35
use are assessed annually regardless of whether there is an indication that the related assets may
be impaired. In testing for impairment, the recoverable amount of the CGU is estimated in order to
determine the extent of the impairment loss, if any.
The recoverable amount of an asset or cash generating unit is the greater of its value in use and its
fair value less costs to sell. In assessing value in use, the estimated future cash (cid:248) ows are discounted to
their present value using a pre-tax discount rate that re(cid:248) ects current market assessments of the time
value of money and the risks speci(cid:246) c to the asset. For impairment testing, assets that cannot be tested
individually are grouped together into the smallest group of assets that generates cash in(cid:248) ows from
continuing use that are largely independent of the cash in(cid:248) ows of other assets or groups of assets (the
cash-generating unit, or CGU).
An impairment loss is recorded when the recoverable amount of an asset or its CGU is less than its
carrying amounts. Impairment losses are evaluated for potential reversals when events or changes in
circumstances warrant such consideration.
k. Revenue recognition:
Revenue is recognized upon transfer of control of goods or services to the buyer in an amount that
re(cid:248) ects the consideration the Company expects to receive in exchange for those good or services.
The Company’s goods and services are generally distinct and accounted for as separate performance
obligations. Billings in excess of revenue are recorded as unearned revenue. Revenue recognized in
excess of billings is recorded as unbilled revenue.
The company recognizes an asset related to the incremental costs of obtaining a contract with a
customer. The Company has elected to make use of the practical expedient and will expense sales
commission costs when incurred if the amortization period is less than 12 months.
i. Data licenses:
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. Customers obtain control of data products
upon receipt of a physical hard drive or download of the data from a web link provided. Invoices
are generated, and revenue is recognized when control is transferred. Invoices are generally paid
within 30 days.
ii. Software subscriptions:
Software subscriptions are generally at least one year, with invoices issued and paid at the
beginning of the license term. Revenue is recognized over time, and payments for future months
of service are recognized in unearned revenue. While the license agreements are for a (cid:246) xed term,
some agreements also contain a limited number of clicks or uses. If the limit is reached prior to the
end of the term, the license ends early.
iii. Fixed-price contracts:
Revenue from acquisition service contracts is recognized over time based on the ratio of costs
incurred to estimated total contract costs. 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. Invoices are issued according to contractual terms and are usually payable within 30 days.
Revenue recognized in excess of billings is recorded as unbilled revenue.
iv. Multiple performance obligations:
When a single sales transaction requires more than one performance obligation, the total amount
of consideration to be received is allocated to distinct products or services deliverables based on
the stand-alone selling price of each.
36
2023 Annual Report | Consolidated Financial Statements
l.
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 re(cid:248) ect 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 re(cid:248) ect such conditions and there is no true-up for
diff erences 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.
m. 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.
n. Financial instruments:
i.
Initial measurement and classi(cid:246) cation:
Non-derivative (cid:246) nancial assets: The Company initially recognizes amounts receivable on the date
that they are originated. All other (cid:246) nancial assets are recognized initially on the date at which
the Company becomes a party to the contractual provisions of the instrument. The Company
determines the classi(cid:246) cation of its (cid:246) nancial assets on the basis of both the business model for
managing (cid:246) nancial assets and the contractual cash (cid:248) ow characteristics of the (cid:246) nancial assets.
Financial assets are not reclassi(cid:246) ed subsequent to their initial recognition unless the Company
changes its business model for managing (cid:246) nancial assets.
Assets at amortized cost: Amounts receivable are (cid:246) nancial assets with (cid:246) xed 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. A (cid:246) nancial asset is measured at amortized cost if it
is held within a business model whose objective is to hold assets to collect contractual cash (cid:248) ows
and its contractual terms give rise on speci(cid:246) ed dates to cash (cid:248) ows that are solely payments of
principal and interest on the principal amount outstanding.
Financial assets at fair value through pro(cid:246) t and loss: Equity investments that are held for trading
are classi(cid:246) ed at FVTPL
Financial liabilities at amortized cost: The Company initially recognizes debt liabilities on the date
that they are originated. All other (cid:246) nancial liabilities are recognized initially on the date at which
the Company becomes a party to the contractual provisions of the instrument.
ii. Subsequent measurement:
Non-derivative (cid:246) nancial assets: The Company derecognizes a (cid:246) nancial asset when the contractual
rights to the cash (cid:248) ows from the asset expire, or it transfers the rights to receive the contractual
cash (cid:248) ows on the (cid:246) nancial asset in a transaction in which substantially all the risks and rewards of
ownership of the (cid:246) nancial asset are transferred. Any interest in transferred (cid:246) nancial assets that is
created or retained by the Company is recognized as a separate asset or liability.
Financial assets and liabilities are off set, and the net amount presented in the consolidated
2023 Annual Report | Consolidated Financial Statements
37
statements of (cid:246) nancial position when, and only when, the Company has a legal right to off set the
amounts and intends either to settle on a net basis or to realize the asset and settle the liability
simultaneously.
Assets at amortized cost: Subsequent to initial recognition, trade receivables are measured at
amortized cost using the eff ective interest method, less any impairment losses.
Financial assets at fair value through pro(cid:246) t and loss: Equity investments are measured at fair value.
Net changes in the fair value are recognized in pro(cid:246) t and loss.
Financial liabilities at amortized cost: The Company derecognizes a (cid:246) nancial liability when its
contractual obligations are discharged, cancelled or expire.
Such (cid:246) nancial liabilities are recognized initially at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, these (cid:246) nancial liabilities are measured at
amortized cost using the eff ective interest method.
The following is a summary of the classi(cid:246) cation the Company has applied to each of its signi(cid:246) cant
categories of (cid:246) nancial instruments outstanding:
iii. Fair value measurement:
Financial instruments recorded at fair value on the consolidated statements of (cid:246) nancial position
are classi(cid:246) ed using a fair value hierarchy that re(cid:248) ects the signi(cid:246) cance of the inputs used in making
the measurements. The fair value hierarchy has the following levels:
Level 1 – valuations based on quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2 – valuation techniques based on inputs other than quoted prices included in Level 1 that
are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from
prices);
Level 3 – valuation techniques using inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
During the reporting periods, there were no transfers between Level 1 and Level 2 fair value
measurements.
iv.
Impairment of (cid:246) nancial assets:
Loss allowances are measured based on the lifetime expected credit losses (ECLs). When
determining whether the credit risk of a (cid:246) nancial asset has increased signi(cid:246) cantly since initial
recognition and then estimating ECLs, the Company considers reasonable and supportable
information that is relevant and available without undue cost or eff ort. This includes both
quantitative and qualitative information and analysis, based on historical experience and forward-
looking information. The Company considers a (cid:246) nancial asset to be in default when the customer
is highly unlikely to pay its obligation in full and then impairs the asset.
38
2023 Annual Report | Consolidated Financial Statements
o. Share capital:
Ordinary shares are classi(cid:246) ed as equity. Incremental costs directly attributable to the issue of ordinary
shares are recognized as a deduction from equity, net of any tax eff ects.
p. Warrants:
Warrants are classi(cid:246) ed as equity. Proceeds from the sale of combined (cid:246) nancial instruments that include
warrants are allocated to their components based on their relative fair values. The fair value of warrants
is estimated using the Black-Scholes option pricing model at the time of their issuance. If warrants
are exercised, a pro-rata portion of the amount recognized at their original issuance is transferred to
common shares. If warrants expire unexercised, the amount recognized at their original issuance is
transferred to contributed surplus.
4. New and revised IFRS accounting pronouncements:
a. Amendments to IAS 1 – Disclosures of Accounting Policies
Eff ective January 1, 2023, the Company adopted amendments within IAS 1 – Presentation of (cid:246) nancial
statements related to the disclosure of accounting policies. The changes required an entity to disclose
material rather than signi(cid:246) cant accounting policies and provided guidance identifying material
accounting policies relevant to users of the (cid:246) nancial statements. Accordingly, management reviewed
its accounting policies and updated the accounting policy information within Note 3 to align with
these amendments.
b. Amendments to IAS 8 – De(cid:246) nition of accounting estimates
Eff ective January 1, 2023, the Company adopted amendments to IAS 8 – Accounting Policies, Changes
in Accounting Estimates and Errors. The amendments to IAS 8 replace the de(cid:246) nition of a “change in
accounting estimates” with a de(cid:246) nition of “accounting estimates”. Under the new de(cid:246) nition, accounting
estimates are “monetary amounts in (cid:246) nancial statements that are subject to measurement uncertainty”.
Entities develop accounting estimates if accounting policies require items in (cid:246) nancial statements to be
measured in a way that involves measurement uncertainty. The amendments con(cid:246) rm that a change
in an accounting estimate that results from new information or new developments is not a correction
of an error. The adoption of these amendments did not have a material impact on the condensed
consolidated interim (cid:246) nancial statements.
5. Property and equipment:
2023 Annual Report | Consolidated Financial Statements
39
Aircraft
and
engines
Radar and
mapping
equipment
Furniture
and
fixtures
Leasehold
improvements
Under
construction
Total
Balance at December 31, 2021
$
530
$
1,789
$
8
$
-
$
153
$
2,480
Additions
Depreciation
-
(100)
14
(1,021)
-
(4)
-
-
18
-
32
(1,125)
Balance at December 31, 2022
$
430
$
782
$
4
$
-
$
171
$
1,387
Additions
Depreciation
Disposal
-
(51)
-
-
(494)
(3)
-
-
(2)
13
(2)
-
131
-
-
144
(549)
(3)
Balance at December 31, 2023
$
379
$
285
$
2
$
11
$
302
$
979
During the twelve months ended December 31, 2023, the Company disposed of fully depreciated assets
with an original cost of $8.3 million (December 31, 2022 - $Nil), a net book value of $Nil (December 31, 2022
- $Nil), recognized a loss of $3 (December 31, 2022 - $Nil), and received cash proceeds of $Nil (December 31,
2022 - $Nil).
6.
Intangible assets:
7. Right of use assets:
40
2023 Annual Report | Consolidated Financial Statements
During the twelve months ended December 31, 2023, the Company executed a 3-year offi ce facility lease in
Colorado, extended the data storage lease by one year, and extended the Prague offi ce facility lease by two
years. During the twelve months ended December 31, 2022, the Company executed a 2-year equipment
lease, extended the offi ce facility leases in Colorado and Jakarta by one year, and adjusted a lease with an
increased payment.
8.
Investment:
The Company has an investment in a privately held company over which the Company exercises no control
or signi(cid:246) cant in(cid:248) uence. The fair value of the investment at December 31, 2023 was estimated using a
market-based approach with primarily unobservable inputs, including the comparable enterprise value
to revenue multiples discounted for considerations such as the lack of marketability and other diff erences
between the comparable peer group and the privately held company. Revenue multiples were selected
from comparable public companies based on, industry, size, target markets, and other factors that the
Company considers to be reasonable. The comparable enterprise value to revenue multiple was applied to
the trailing twelve months actual revenues of the privately held company to determine the enterprise value
of the privately held company. Once the enterprise value of the privately held company was determined
the net debt was removed (total debt less cash) and the remaining equity value was allocated to the capital
of the privately held company in order of ranking (e.g., preferred shares, common shares). At December
31, 2023, the fair value was estimated to be $849 (December 31, 2022 - $1,011) and is a level 3 fair value
measurement. A 20% change in the estimated value of the investment would impact net income by
approximately $170.
9. Accounts payable and accrued liabilities:
During the twelve months ended December 31, 2023, the Company reversed excess vendor payables of $52
(December 31, 2022 - $6) recorded in prior years based on IFRS 9 derecognition of (cid:246) nancial liabilities as the
liabilities have expired.
2023 Annual Report | Consolidated Financial Statements
41
10. Financial liabilities:
The following table provides a reconciliation of movements of liabilities to cash (cid:248) ows arising from (cid:246) nancing
activities and balances at December 31, 2023 and 2022:
a. Bank Loan:
On August 8, 2022, the Company executed a bank loan in the Czech Republic to (cid:246) nance the purchase
of foundation data for 2,500,000 Czech Republic koruna (equivalent $110 thousand). Interest accrues at
10.71% and minimum monthly installment payments of $4 thousand began in December 2022.
b. Project (cid:246) nancing:
Reimbursable project development funds provided by a corporation designed to enable the
development and commercialization of geomatics solutions in Canada. The funding is repayable upon
the completion of a speci(cid:246) c development project and the (cid:246) rst sale of any of the resulting product(s).
Repayment is to be made in quarterly installments equal to the lesser of 20% of the funding amount
or 25% of the prior quarter’s sales. There were no sales of the related products during the years ended
December 31, 2023 and 2022.
42
2023 Annual Report | Consolidated Financial Statements
c. Government loans:
i.
SBA loan:
On July 17, 2020, the Company received a $150 long-term loan from the Small Business
Administration (SBA). Interest will accrue at the rate of 3.75% per annum and payments of $0.7
monthly began twelve months from the date the funds were received. The balance of principal
and interest will be payable thirty years from the date of the note.
ii. Western Development Canada loan:
On December 29, 2020, the Company received a $385 (C$494) long-term loan from Western
Economic Diversi(cid:246) cation in Canada. The loan will be repaid in 36 monthly installments that started
in January 2023. The loan is non-interest bearing, and therefore the fair value at inception must be
estimated to account for an imputed interest factor. The value at inception was determined to be
$312, based on the estimated discount rate of 6.07%, and is subject to estimation uncertainty. The
resulting discount of $73 was recognized in government grants at December 31, 2020 and will be
accreted through interest expense over the term of the loan using the eff ective interest method.
11. Lease obligations:
The following table presents the contractual undiscounted cash (cid:248) ows for lease obligations which require
the following payments for each period ending December 31:
Interest expense on lease obligations for the year ended December 31, 2023 was $27 (December 31, 2022
– $27). Total cash out(cid:248) ow for leases was $327 (December 31, 2022 – $339), and $337 (December 31, 2022 –
$292) for short-term and low-value operating leases for equipment and offi ce spaces.
The Company also has contractual undiscounted cash (cid:248) ows for short-term and low-value operating leases
for equipment and maintenance that are not on the statements of (cid:246) nancial position which require the
payments of $247 for the twelve months ending December 31, 2024.
2023 Annual Report | Consolidated Financial Statements
43
12. Revenue:
Details of revenue are as follows:
Changes in the unbilled revenue balance are as follows:
Changes in the unearned revenue balance are as follows:
For the twelve months ended December 31,
2023
2022
Unearned revenue, beginning of period
Recognition of unearned revenue included in the
beginning balance
Recognition of unearned revenue in the current period
Amounts invoiced and revenue unearned
Foreign exchange
Unearned revenue, end of period
$
2,953
$
1,721
(2,012)
(2,037)
3,649
-
2,553
$
(1,135)
(1,533)
3,914
(14)
2,953
$
The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the
expected bene(cid:246) t of those costs is longer than one year. The Company determined that certain commissions
paid to sales employees meet the requirement to be capitalized. Total capitalized cost included in prepaid
expenses and other assets to obtain contracts at December 31, 2023 was $114 (2022 – $60).
44
2023 Annual Report | Consolidated Financial Statements
13. Operating and non-operating costs:
a. Operating costs:
(1) Purchased services and materials include aircraft costs, project costs, professional and consulting fees, and selling and
marketing costs.
b. Financing costs:
14. Share capital:
a. Authorized:
The authorized share capital of the Company consists of an unlimited number of Class A common
shares and an unlimited number of Class A participating preferred shares. There are no Class A
participating preferred shares outstanding.
b.
Issued:
On December 21, 2023, the Company completed a private placement resulting in the issuance of
1,650,000 Units for aggregate consideration of $621. Each Unit had a purchase price of C$0.50 and
consisted of one Class A common share of the Corporation and one Class A common share purchase
warrant. Each warrant entitles the holder to purchase one Class A common share at a purchase price
of US$0.60 per share for a period of two years from the issue date. The total consideration received
was allocated to Share Capital and Warrants on a relative fair value basis. The fair value of the warrants
was determined using the Black Scholes pricing model based on the risk-free rate of 4.18%, average
expected warrant life of 2 years, share price estimated volatility of 72% and expected dividend
payments of Nil. In addition, the Corporation paid (cid:246) nder’s fees of $32 and issued 81,000 warrants to
a third party for services rendered in connection with the transaction. The (cid:246) nder’s fee warrants were
issued on the same terms as the private placement warrants with an exercise price of US$0.40. The
Company recorded non-cash issuance costs related to this award based on the fair value of the award
at the date of the closing of $10, bringing the total costs of the issuance to $42.
On October 20, 2023, the Company completed a private placement resulting in the issuance of 695,000
Units for aggregate consideration of $288. Each Unit had a purchase price of C$0.55 and consisted of
one Class A common share of the Corporation and one Class A common share purchase warrant. Each
warrant entitles the holder to purchase one Class A common share at a purchase price of US$0.58 per
2023 Annual Report | Consolidated Financial Statements
45
share for a period of two years from the issue date. The total consideration received was allocated to
Share Capital and Warrants on a relative fair value basis. The fair value of the warrants was determined
using the Black Scholes pricing model based on the risk-free rate of 4.92%, average expected
warrant life of 2 years, share price estimated volatility of 73% and expected dividend payments of
Nil. In addition, the Corporation paid (cid:246) nder’s fees of $17 and issued 41,700 warrants to a third party
for services rendered in connection with the transaction. The (cid:246) nder’s fee warrants were issued on
the same terms as the private placement warrants with an exercise price of US$0.58. The Company
recorded non-cash issuance costs related to this award based on the fair value of the award at the date
of the closing of $7, bringing the total costs of the issuance to $24.
During the third quarter of 2023, the Company completed a private placement resulting in the
issuance of 1,497,045 Units for aggregate consideration of $610. Each Unit had a purchase price of
C$0.55 and consisted of one Class A common share of the Corporation and one Class A common
share purchase warrant. Each warrant entitles the holder to purchase one Class A common share
at a purchase price of US$0.59 per share for a period of two years from the issue date. The total
consideration received was allocated to Share Capital and Warrants on a relative fair value basis. The
fair value of the warrants was determined using the Black Scholes pricing model based on the risk-free
rate of 4.70%, average expected warrant life of 2 years, share price estimated volatility of 73% and
expected dividend payments of Nil. In addition, the Corporation paid (cid:246) nder’s fees of $35 and issued
48,600 warrants to a third party for services rendered in connection with the transaction. The (cid:246) nder’s
fee warrants were issued on the same terms as the private placement warrants with an exercise price of
US$0.49. The Company recorded non-cash issuance costs related to this award based on the fair value
of the award at the date of the closing of $16, bringing the total costs of the issuance to $51.
On December 7, 2022, the Company completed a private placement resulting in the issuance of
250,000 Units for aggregate consideration of $74. Each Unit had a purchase price of C$0.40 and
consisted of one Class A common share of the Corporation and one Class A common share purchase
warrant. Each warrant entitles the holder to purchase one Class A common share at a purchase price
of US$0.44 per share for a period of two years from the issue date. The total consideration received
was allocated to Share Capital and Warrants on a relative fair value basis. The fair value of the warrants
was determined using the Black Scholes pricing model based on the risk-free rate of 3.86%, average
expected warrant life of 2 years, share price estimated volatility of 83% and expected dividend
payments of Nil. In addition, the Corporation paid (cid:246) nder’s fees of $7 and issued 15,000 warrants to a
third party for services rendered in connection with the transaction. The (cid:246) nder’s fee warrants were
issued on the same terms as the private placement warrants with an exercise price of US$0.44. The
Company recorded non-cash issuance costs related to this award based on the fair value of the award
at the date of the closing of $2, bringing the total costs of the issuance to $9.
During November 2022, the Company completed a private placement resulting in the issuance of
3,020,000 Units for aggregate consideration of $906. Each Unit had a purchase price of C$0.40 and
consisted of one Class A common share of the Corporation and one Class A common share purchase
warrant. Each warrant entitles the holder to purchase one Class A common share at a purchase price
of US$0.45 per share for a period of two years from the issue date. The total consideration received
was allocated to Share Capital and Warrants on a relative fair value basis. The fair value of the warrants
was determined using the Black Scholes pricing model based on the risk-free rate of 3.87%, average
expected warrant life of 2 years, share price estimated volatility of 84% and expected dividend
payments of Nil. In addition, the Corporation paid (cid:246) nder’s fees of $81 and issued 168,900 warrants to
a third party for services rendered in connection with the transaction. The (cid:246) nders fee warrants were
issued on the same terms as the private placement warrants with an exercise price of US$0.45. The
Company recorded non-cash issuance costs related to this award based on the fair value of the award
at the date of the closing of $29, bringing the total costs of the issuance to $110.
46
2023 Annual Report | Consolidated Financial Statements
On October 14, 2022, the Company issued 1,000,000 Class A common shares at C$0.40 per share in
connection with a private placement. The Company received $291 in proceeds and issuance costs of
$26 was paid in cash.
On March 18, 2022, the Company issued 1,470,588 Class A common shares at C$0.51 per share in
connection with a private placement. The Company received $596 in proceeds and recorded $111 in
issuance costs, of which $19 settled through warrants (see Note 15) and $92 was paid in cash.
During February 2022, the Company issued 2,537,700 Class A common shares at C$0.51 per share in
connection with two private placements. The Company received $1,015 in proceeds and recorded $28
in issuance costs, of which $11 settled through warrants (see Note 15) and $17 was paid in cash.
c. Contributed surplus:
d. Loss per share:
The calculation of loss per share is based on the weighted average number of Class A common shares
outstanding. Where the impact of the exercise of options or warrants is anti-dilutive, they are not
included in the calculation of diluted loss per share. The Company has incurred a net loss for each
period presented and the inclusion of the outstanding options and warrants in the loss per share
calculation are anti-dilutive and therefore not included in the calculation.
The underlying Class A common shares pertaining to 794,443 outstanding share options, 3,779,623
restricted share units (RSUs), and 7,598,980 outstanding warrants could potentially dilute earnings.
e. Share option plan:
The Company established a share option plan to provide long-term incentives to attract, motivate, and
retain certain key employees, offi cers, directors, and consultants providing services to the Company.
The plan permitted granting options to purchase up to 10% of the outstanding Class A common shares
of the Company. The share option plan was replaced by the Omnibus Incentive Plan at the Annual
General Meeting on March 15, 2018 (see Note 14(f)), and all options issued and outstanding at that
time will remain until such time they are exercised, expired, or forfeited. As of December 31, 2023,
794,443 share options are issued and outstanding. No additional options will be issued under this plan.
The following tables summarize information regarding share options outstanding:
2023 Annual Report | Consolidated Financial Statements
47
During the twelve months ended December 31, 2023 and 2022, the Company recognized $Nil of non-
cash compensation expense related to the share option plan.
f. Omnibus plan:
The Omnibus Incentive Plan (Omnibus plan) was approved by the shareholders at the Annual General
Meeting on March 15, 2018 and replaces the share option plan, the employee share compensation
plan and the director’s share compensation plan, which provided for shares to be issued to employees
and directors as compensation for services. The omnibus plan permits the issuance of options, stock
appreciation rights, restricted share units and other share-based awards under one single plan.
The maximum number of common shares reserved under the omnibus plan was 3,363,631. Any
common shares reserved under the predecessor share option plan related to awards that expire
or forfeit will be rolled into the omnibus plan. At the Annual General Meeting on June 29, 2021,
shareholders approved replenishment of 997,253 Common Shares reserved for issuance under the
omnibus plan. At the Annual General Meeting on June 29, 2023, shareholders approved replenishment
of 1,300,000 Common Shares reserved for issuance under the omnibus plan, for a total reserve
of 5,660,884. As of December 31, 2023, 794,443 share options and 3,779,623 RSUs are issued and
outstanding. In addition, 872,183 Class A common shares were issued during 2018, 125,070 Class A
common shares were issued during 2020, and 50,000 shares were issued during 2021 under the plan,
leaving 39,565 awards remain available for future issuance.
The following table summarizes information regarding RSUs outstanding:
During the twelve months ended December 31, 2023, 1,325,879 RSUs (twelve months ended
December 31, 2022 – 1,132,860) were issued at a weighted average grant date fair value of C$0.58 per
share (twelve months ended December 31, 2022 – C$0.58 per share). During the twelve months ended
December 31, 2023, the Company recognized $304 (twelve months ended December 31, 2022 – $412)
of non-cash compensation expense related to the RSUs.
g. Share-based compensation expense:
Non-cash compensation expense has been included in operating costs with respect to the share
options, RSUs and shares granted to employees and non-employees as follows:
48
2023 Annual Report | Consolidated Financial Statements
15. Class A common share purchase warrants:
The following table details the number of Class A common share purchase warrants outstanding at each
statement of (cid:246) nancial position date:
Grant Date Expiry Date
Exercise
Price
4/27/2021
7/30/2021
8/9/2021
8/18/2021
9/20/2021
2/11/2022
3/19/2022
4/27/2023 US$ 0.73
7/29/2023 US$ 0.80
8/8/2023 US$ 0.80
8/17/2023 US$ 0.88
9/19/2023 US$ 0.87
2/10/2024 US$ 0.54
3/18/2024 US$ 0.54
11/16/2022 11/15/2024 US$ 0.45
11/18/2022 11/17/2024 US$ 0.45
12/6/2024 US$ 0.44
8/9/2025 US$ 0.60
8/9/2025 US$ 0.49
8/15/2025 US$ 0.59
9/4/2025 US$ 0.59
10/20/2023 10/19/2025 US$ 0.59
10/20/2023 10/19/2025 US$ 0.59
12/21/2023 12/20/2025 US$ 0.60
12/21/2023 12/20/2025 US$ 0.40
12/7/2022
8/10/2023
8/10/2023
8/16/2023
9/5/2023
Granted
60,000
131,166
45,000
12,000
6,666
43,500
88,235
2,929,900
259,000
265,000
810,000
48,600
602,500
84,545
695,000
41,700
1,650,000
81,000
Number of
Warrants
Outstanding
December
31, 2022
60,000
131,166
45,000
12,000
6,666
43,500
88,235
2,929,900
259,000
265,000
Number of
Warrants
Outstanding
December
31, 2023
Issued
Expired
-
-
-
-
-
-
-
-
-
-
(60,000)
(131,166)
(45,000)
(12,000)
(6,666)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
43,500
88,235
2,929,900
259,000
265,000
810,000
48,600
602,500
84,545
695,000
41,700
1,650,000
81,000
-
-
-
-
-
-
-
-
810,000
48,600
602,500
84,545
695,000
41,700
1,650,000
81,000
The following table details the value of the broker and non-broker Class A common share purchase warrants
outstanding at each statement of (cid:246) nancial position date.
7,853,812
3,840,467
4,013,345
(254,832)
7,598,980
Non-Broker
Broker
Number of
Warrants
Value
Number of
Warrants
Value
Total
Number of
Warrants
Value
Balance at December 31, 2021
-
$
-
413,834
$
232
413,834
$
232
Issued
Expired
3,270,000
-
294
-
315,635
(159,002)
60
(93)
3,585,635
(159,002)
354
(93)
Balance at December 31, 2022
3,270,000
$
294
570,467
$
199
3,840,467
$
493
Issued
Expired
3,842,045
-
404
-
171,300
(254,832)
32
(138)
4,013,345
(254,832)
436
(138)
Balance at December 31, 2023
7,112,045
$
698
486,935
$
93
7,598,980
$
791
Each warrant entitles its holder to purchase one Class A common share.
16. Income Taxes:
a. Current tax (expense) recovery:
2023 Annual Report | Consolidated Financial Statements
49
b. Reconciliation of eff ective tax rate:
Income tax expense varies from the amount that would be computed by applying the basic federal
and provincial income tax rates to the net income (losses) before taxes as follows:
c. Recognized deferred tax assets and liabilities:
Deferred income taxes re(cid:248) ect the impact of temporary diff erences between amounts of assets and
liabilities for (cid:246) nancial reporting purposes and such amounts as measured by tax laws. Deferred tax
assets and liabilities recognized at December 31, 2023 and 2022, are as follows:
d. Unrecognized deferred tax assets:
Deferred tax assets have not been recognized in respect of the following items:
The deferred tax asset is recognized when it is probable that future taxable pro(cid:246) t will be available to
utilize the bene(cid:246) ts. The Company has not recognized deferred tax assets with respect to these items
due to the uncertainty of future Company earnings.
Loss carry forwards:
At December 31, 2023, approximately $206,485 of loss carry forwards and $2,405 of tax credits were
available in various jurisdictions. At December 31, 2023, $3,307 of loss carry forwards were recognized
as a deferred tax asset. A summary of losses by year of expiry are as follows:
50
2023 Annual Report | Consolidated Financial Statements
e. Movement in deferred tax balances during the year:
17. Segmented information:
The operations of the Company are in one industry segment: digital mapping and related services. Revenue
by geographic segment is included in Note 12.
Property and equipment of the Company are located as follows:
A summary of sales to major customers that exceeded 10% of total sales during each period are as follows:
18. Financial risk management:
The Company has exposure to the following risks from its use of (cid:246) nancial instruments: credit risk, market
risk, liquidity risk, and capital risk. Management, the Board of Directors, and the Audit Committee monitor
risk management activities and review the adequacy of such activities. This note presents information about
the Company’s exposure to each of the risks as well as the objectives, policies and processes for measuring
and managing those risks.
The Company’s risk management policies are established to identify and analyze the risks faced by the
Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to re(cid:248) ect changes in market conditions and the
Company’s activities. The Company, through its training and management standards and procedures, aims
to develop a disciplined and constructive control environment in which all employees understand their
roles and obligations.
a. Credit risk
Credit risk is the risk of (cid:246) nancial loss to the Company if a customer or counterparty to a (cid:246) nancial
instrument fails to meet its contractual obligations. Such risks arise principally from certain (cid:246) nancial
assets held by the Company consisting of outstanding trade receivables.
The Company’s exposure to credit risk is in(cid:248) uenced mainly by the individual characteristics of each
customer. However, management also considers the demographics of the Company’s customer base,
including the default risk of the industry and country in which customers operate, as these factors may
have an in(cid:248) uence on credit risk.
Approximately 28 percent of the Company’s revenue is attributable to transactions with four key
customers (year ended December 31, 2022 – 16 percent of the revenue was attributable to one key
2023 Annual Report | Consolidated Financial Statements
51
customer), approximately 4 percent of the Company’s trade receivables at year end are attributable to
customers located in Asia/Paci(cid:246) c (December 31, 2022 – approximately 1 percent), and approximately
65 percent of the Company’s trade receivables at year end are attributable to customers located in
Europe (December 31, 2022 – approximately 97 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
off ered.
A signi(cid:246) cant 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
(cid:246) nancial assets.
i.
Trade receivables
Expected credit losses 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, 2023 and 2022, consist of:
Trade receivables
Other miscellaneous receivables
Trade receivables by geography consist of:
December 31, December 31,
2022
2023
$
283
29
$
1,268
22
$
312
$
1,290
An aging of the Company’s trade receivables are as follows:
The balance of the past due amounts relates to reoccurring customers and are considered collectible.
ii. Cash
The Company manages its credit risk surrounding cash by dealing solely with what management
believes to be reputable banks and (cid:246) nancial institutions and limiting the allocation of excess
funds into (cid:246) nancial instruments that management believes to be highly liquid, low risk
investments. The balance at December 31, 2023, is held in unrestricted cash at banks within
the United States, Canada, Europe, and Asia to facilitate the payment of operations in those
jurisdictions.
52
2023 Annual Report | Consolidated Financial Statements
b. Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates,
will aff ect the Company’s income or the value of its holding of (cid:246) nancial instruments.
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
koruna, Malaysian ringgit and Australian dollar. Foreign exchange risk arises from sales and
purchase transactions as well as recognized (cid:246) nancial assets and liabilities that are denominated
in a currency other than the United States dollar, which is the functional currency of the Company
and most its subsidiaries.
The Company’s primary objective in managing its foreign exchange risk is to preserve sales values
and cash (cid:248) ows and reduce variations in performance. Although management monitors exposure
to such (cid:248) uctuations, it does not employ any external hedging strategies to counteract the foreign
currency (cid:248) uctuations.
The balances in foreign currencies at December 31, 2023, are as follows:
(in USD)
Cash
Trade receivables
Accounts payable and
accrued liabilities
Project financing
Government loans
Bank loan
Australian
Dollar
Canadian
Dollar
Euro
British
Pound
Indonesian
Rupiah
Czech
Republic
Koruna
-
$
10
$
555
10
$
42
59
-
$
25
4
$
23
$
31
20
(4)
-
-
-
(780)
(182)
(244)
-
(33)
-
-
-
(48)
-
-
-
(206)
-
-
-
(273)
-
-
(71)
$
6
$
(641)
$
68
$
(23)
$
(179)
$
(293)
The balances in foreign currencies at December 31, 2022, are as follows:
(in USD)
Cash
Trade receivables
Accounts payable and
accrued liabilities
Project financing
Government loans
Bank loan
Australian
Dollar
Canadian
Dollar
Euro
British
Pound
Indonesian
Rupiah
Czech
Republic
Koruna
$
-
9
(5)
-
-
-
$
230
7
$
8
23
$
-
58
$
9
18
$
495
97
(592)
(177)
(333)
-
(28)
-
-
-
(15)
-
-
-
(162)
-
-
-
(364)
-
-
(108)
$
4
$
(865)
$
3
$
43
$
(135)
$
120
Based on the net exposures at December 31, 2023 and 2022, and if all other variables remain
constant, a 10% depreciation or appreciation of the United States dollar against the following
currencies would result in an increase / (decrease) in net earnings by the amounts shown below:
2023 Annual Report | Consolidated Financial Statements
53
ii.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash (cid:248) ows of a (cid:246) nancial instrument will
(cid:248) uctuate because of changes in market interest rates.
Financial assets and (cid:246) nancial liabilities with variable interest rates expose the Company to cash (cid:248) ow
interest rate risk. The Company does not have any debt instruments outstanding with variable interest
rates at December 31, 2023, or December 31, 2022.
Financial liabilities that bear interest at (cid:246) xed 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 (cid:246) nancing costs on its borrowings and
maximizing interest income earned on excess funds while maintaining the liquidity necessary to
conduct operations on a day-to-day basis.
c.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due.
The Company’s approach to managing capital is to ensure, as far as possible, that it will have suffi cient
liquidity to meets its obligations.
The Company manages its liquidity risk by evaluating working capital availability and forecasting cash
(cid:248) ows from operations and anticipated investing and (cid:246) nancing activities. At December 31, 2023, the
Company has a cash balance of $677 (December 31, 2022 – $843) and working capital (current assets
less current liabilities) of negative $6,114 (December 31, 2022 – negative $4,431). The Company’s
liquidity is dependent on management’s ability to successfully secure sales with upfront payments, and
/ or obtain additional (cid:246) nancing.
The following are the contractual maturities of the undiscounted cash (cid:248) ows of (cid:246) nancial liabilities as of
December 31, 2023:
54
2023 Annual Report | Consolidated Financial Statements
The following are the contractual maturities of the undiscounted cash (cid:248) ows of (cid:246) nancial liabilities as of
December 31, 2022:
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 con(cid:246) dence, and to sustain future development of the business
and ultimately protect shareholder value. The Company manages its risks and exposures by implementing
the strategies below.
The Company includes shareholders’ de(cid:246) ciency, long-term bank loan, long-term portion of project
(cid:246) nancing, long-term government loans, and long-term portion of lease obligations in the de(cid:246) nition of
capital. Total capital at December 31, 2023, was negative $2,878 (December 31, 2022 – negative $619). To
maintain or adjust the capital structure, the Company may issue new shares, issue new debt with diff erent
characteristics, acquire or dispose of assets, or adjust the amount of cash balances held.
The Company has established a budgeting and planning process with a focus on cash, working capital,
and operational expenditures and continuously assesses its capital structure considering current economic
conditions and changes in the Company’s short-term and long-term plans. Neither the Company nor any
of its subsidiaries are subject to externally imposed capital requirements.
19. Fair values:
Set out below is a comparison by class of the carrying amounts and fair value of the Company’s (cid:246) nancial
instruments that are carried in the consolidated statement of (cid:246) nancial position:
The fair values of the (cid:246) nancial assets and liabilities are determined at the amount at which the instrument
could be exchanged in a current transaction between willing parties, other than in a forced or liquidation
sale.
55
The following methods and assumptions were used to estimate the fair values:
•
•
•
Cash, amounts receivable, accounts payable and accrued liabilities and provisions approximate their
carrying amounts largely due to the short-term maturities of these instruments.
Carrying amount of investments is adjusted to the approximate fair value at the reporting date (see
Note 8).
Carrying amount of project (cid:246) nancing, bank loan and government loans approximates fair value due to
prevailing interest rates and the risk characteristics of the instrument.
20. Key management personnel and director compensation:
The Company’s compensation program speci(cid:246) cally provides for total compensation for executive offi cers,
which is a combination of base salary, performance-based incentives and bene(cid:246) t programs that re(cid:248) ect
aggregated competitive pay considering business achievement, ful(cid:246) llment of individual objectives and
overall job performance. Executive offi cers participate in the Company’s omnibus plan (Note 14(f)).
The compensation of non-employee directors consists of a cash component and a share component.
Directors participate in the Company’s omnibus plan (Note 14(f)).
The following summarizes key management personnel and directors’ compensation for the years ended
December 31, 2023 and 2022:
The following summarizes key management personnel and directors share ownership of the Company as of
December 31, 2023, and 2022:
Intermap Technologies
385 Inverness Pkwy, Suite 105
Englewood, Colorado 80112-5809
United States
Phone: +1 (303) 708-0955
+1 (303) 708-0952
Fax:
info@intermap.com
E-mail:
www.intermap.com
Web:
Denver · Calgary · Jakarta · Prague